Russia’s manufacturing sector saw near-record employment growth in May, according to a new report from S&P Global, as an already tight labor market struggles to meet the surge in demand for workers.
S&P Global’s Purchasing Managers’ Index (PMI) for Russian manufacturing rose to 54.4 last month compared to 54.3 in April. A PMI value above 50 points indicates growth, whereas anything below signifies a decline.
“Output growth strengthened amid sustained and robust customer demand, which drove the upturn in new orders,” the report read. “The sharp rise in new business led firms to expand capacity, as the pace of job creation accelerated to the second-fastest on record.”
According to S&P Global, manufacturing job growth last month was the sharpest since September 1997, when Russia’s economy began to slowly improve after the government ran huge deficits in the previous years to fund the First Chechen War.
“Employment growth stemmed in part from a third successive monthly uptick in backlogs of work,” the S&P Global report read, noting that business confidence slipped to a nine-month low despite the improvements in job creation.
“Nonetheless, the level of optimism still signaled historically upbeat expectations regarding future output,” it added.
Russia’s manufacturing sector has continued to grow despite Western sanctions in response to the full-scale invasion of Ukraine, largely driven by economic activity in the defense industry. Military spending is expected to account for 40% of government spending this year.
But the boom in defense production, combined with the “partial” mobilization of some 300,000 army reservists, has created widespread labor shortages, which has supercharged wage growth.
… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.
We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.
Remind me later.
