According to Reuters’ article published on November 1, 2022, a fragile recovery in Russia's manufacturing sector slowed down in October as sanctions combined with a mass call-up of workers to fight in Ukraine weighed on the country's producers, a business survey showed on Tuesday.
The S&P Global Purchasing Managers' Index (PMI) fell in October to 50.7 from 52.0 in September, slipping closer to the 50.0 mark that separates expansion from contraction.
Employment levels in the manufacturing sector fell at their fastest rate in six months, the survey found.
President Vladimir Putin announced a "partial mobilisation" in late September, and over the last five weeks some 300,000 reservists - mostly young, working men - have been drafted for the military campaign in Ukraine.
"The decrease in workforce numbers was solid overall and the quickest since April. A number of firms suggested that the decline in staffing numbers was due to labour shortages," S&P Global said.
The survey is the latest sign that mobilisation is weighing on a Russian economy already struggling under sanctions, export bans, currency volatility, capital controls and an exodus of Western firms.
Russia's central bank said last week that mobilisation would aggravate shortages in the labour force and create "supply-side restrictions in the broader economy."
Foreign demand also fell sharply during the month, the PMI survey found, as sanctions that have cut industry off from global payments systems, disrupted supply chains and banned the export of crucial materials and hi-tech equipment to Russia, continue to weigh on the economy.
Despite those headwinds, manufacturers' assessments of future output came in at their second-highest monthly reading in 3-1/2 years, S&P Global said.
Firms said they expected growing business from the country's import substitution drive and were hopeful that the most disruptive period of economic turmoil had passed.
