Russia's industrial sector is in a state of stagnation — intelligence report
Russian industry is showing clear signs of a systemic decline in early 2026, despite attempts by official authorities to conceal the true state of affairs.
Ukraine’s Foreign Intelligence Service, citing data from independent analysts, points to a significant discrepancy between Rosstat’s reports and actual production figures.
According to official figures, growth of 1.7% was recorded in December–February, but alternative calculations by the Center for Macroeconomic Analysis and Forecasting (CMAP) indicate the opposite.
During the same period, real production fell by 0.3%, with a 0.6% drop in January that completely offset the brief December uptick.
Civilian sectors are suffering the most from the crisis, where the rate of decline is only accelerating due to the economy’s reorientation toward military needs.
Specifically, in February, production of construction materials fell by 1.4%, ferrous metallurgy dropped by 1.1%, and the machinery sector showed a decline of 2.2%.
An additional indicator of the crisis was the PMI business activity index, which fell to 48.3 points in March.
Any reading below 50 officially confirms a contraction in production, which has been ongoing in Russia for thirteen consecutive months amid a decline in export demand.
A critical situation has developed in the metallurgical industry, where profitability has fallen to 9.6%, which no longer even covers the costs of servicing bank loans.
Industry giant Ural Steel went from a profit to a loss of over $273 million (22 billion rubles) over the course of the year, while Severstal’s profit plummeted fivefold.
Small and medium-sized businesses also found themselves under double pressure due to falling purchasing power and rising taxes.
Over the past year, the number of businesses decreased by 11,500, and according to forecasts for 2026, up to 300,000 more companies could exit the market.
Economic turmoil has led to a rapid deterioration of the social situation and a rise in wage arrears.
Total debt to employees has increased 1.7-fold, reaching nearly $25 million (2 billion rubles), which in most cases is due to a complete lack of working capital.
As a reminder, the Russian economy has weakened, the budget has been revised three times, and the deficit has grown fivefold.
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