Russian business activity plummets in March

Russia's private sector activity last March recorded its fastest contraction since May 2020, as reflected in the composite purchasing managers' index (PMI), which retreated to 37.7 points from 50.8 in February, according to data from S&P Global.

In particular, activity in the Russian manufacturing sector in March accelerated its contraction, with a PMI reading of 44.1 points, down from 48.6 points in February. Meanwhile, services sector activity slumped in March, with the corresponding sub-index falling to 38.1 points from 52.1 in February.

"The latest data pointed to a marked contraction in private sector business activity, with both manufacturers and service providers registering substantial declines," say the survey's authors, who attribute the drop to heightened economic and geopolitical uncertainty.

Thus, the contraction in new orders in March was the fastest since May 2020, as demand from foreign customers fell substantially, while inflationary pressures intensified markedly as input prices and production costs soared to record levels.

Employment, meanwhile, contracted at a faster pace as private sector firms recorded sharp declines in order backlogs and expectations of future production.