Stagnation of Russian Industry at the Beginning of 2026 According to CMAC

At the beginning of 2026, Russian industry is demonstrating signs of stagnation, despite traditionally optimistic official statistical data. This was reported by the Ukrainian Foreign Intelligence Service, which cites a report from the pro-Kremlin Center for Macroeconomic Analysis and Short-Term Forecasting (CMAC).

According to the information provided by the Foreign Intelligence Service, while Rosstat reports a 1.7% increase in industrial production from December to February, CMAC estimates indicate an opposite trend. Following a brief uptick in December, production fell by 0.6% in January and partially recovered in February. Overall, for the three-month period, there is a decrease of 0.3%.

“Civil sectors of the Russian industry accelerated their decline at the beginning of 2026,” noted the analytical center closely linked to the Kremlin. This confirms negative trends across various industrial sectors.

In particular, in February 2026, the production of construction materials decreased by 1.4%, ferrous metallurgy by 1.1%, and machine engineering by 2.2%. In general, most sectors are demonstrating negative dynamics with a decline of 0.8%, including oil refining and metallurgy.

It is worth noting that the production decline in Russia has now persisted for the 13th consecutive month. Export demand has been falling for the fifth month, and purchasing activity is decreasing at the fastest rate in the last four years. Companies are forced to reduce raw material purchases due to declining orders and rising fuel prices. Employment in the sector is also decreasing for the fourth consecutive month.

The March PMI index from S&P Global fell to 48.3, the lowest level in three months, compared to 49.5 in February. The mark of 50 separates growth from contraction, thus indicating further deterioration in the economic situation.

According to CMAC estimates, Russian metallurgy, once considered the flagship of the economy and a stable source of foreign currency inflows, is now in a systemic crisis. The profitability of the sector has dropped to 9.6%, which is below the cost of servicing loans. For example, Urals Steel, an important city-forming enterprise in Novotroitsk, reported losses exceeding 22 billion rubles, compared to a profit of 11 billion rubles the previous year. Consequently, the tax service has been forced to postpone debt collection to avoid the shutdown of the enterprise and the dismissal of 9,000 workers.

The metallurgy giant Severstal also reported a fivefold decrease in profit and a 42% reduction in EBITDA. Small and medium-sized businesses are facing declining demand and increasing tax burdens, resulting in nearly half of enterprises recording a profit collapse in 2025. The number of entities in the trade sector alone decreased by 11,500.

According to CMAC's forecast, another 250,000 to 300,000 enterprises may disappear in 2026. Wage arrears in Russia have increased by 1.7 times and amount to approximately 2 billion rubles. Experts note that 99% of payment delays arise due to the lack of funds among enterprises. As of the end of 2025, hundreds of thousands of workers were in forced downtime.

State funding remains the only support for Russian production, but it does not ensure sustainable growth, as noted by CMAC. By the end of 2025, Russia’s national debt increased by 21%, or 6.1 trillion rubles, reaching 35.1 trillion rubles. Domestic debt rose by 29.1% to 30.7 trillion rubles. The weakening of investment activity and domestic demand accelerates the transition from stagnation to a full-fledged recession, analysts conclude.

On April 2, The Moscow Times reported, citing data from Rosstat and the Ministry of Economic Development, that after a 2.1% decline in January, Russia's GDP contracted by another 1.5%, resulting in an overall decrease of 1.8% over the first two months compared to the same period last year.