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Russian Business Climate Index Drops in May as Demand Weakens and Logistics Pressures Mount
According to the latest monthly survey by the Russian Union of Industrialists and Entrepreneurs (RSPP), the composite Business Environment Index fell by 1.1 points in May 2026 to 45.1 points. The decline was driven primarily by worsening conditions in the financial sector, business-to-government (B2G) interactions, and logistics, while other components showed mixed performance.
The index for manufactured products remained virtually unchanged at 45.2 points. However, respondents expressed a more negative view of procurement prices: that sub-index fell sharply by 5.6 points to 27 points, with only 6.7% of companies reporting lower purchase prices compared to 11.2% in April. In contrast, the selling prices index rose to 55.7 points from 48.3 points, as a quarter of companies reported raising prices in May, up from just 13.5% the previous month.
Demand conditions continued to deteriorate. The industry demand indicator fell to 40.3 points, and the indicator for demand for a company’s own products or services dropped to 42 points. Over 30% of companies reported an overall contraction in market demand. At the same time, the competition index rose slightly to 61 points, indicating persistent high competitive pressure.
The B2B index inched up by 0.4 points to 46.9 points. The sub-index for new orders remained in positive territory at 51 points, though down from 54.5 points a month earlier. Order fulfillment timelines hit a borderline 50 points, with 89.3% of companies reporting no change. The share of negative assessments of overdue obligations from counterparties improved, pushing that indicator up by 1.2 points to 46.7 points. However, the index for counterparty payment discipline remained weak at 40 points, albeit up 1.8 points from April.
Logistics failed to stay in positive territory, with the logistics index falling 2.5 points to 48.2 points. While 88% of companies rated the overall logistics situation as neutral, the remaining respondents leaned negative, pulling the sub-index down to 45 points. Average delivery times edged down slightly, while the inventory level index dropped 4.3 points to 51.3 points, as the share of companies reporting higher inventories fell from one-fifth to 14.6%.
The B2G index returned to negative territory, losing 2.7 points to reach 47.8 points. Over 90% of respondents said their B2G relationships had not changed in character, but negative assessments prevailed across all indicators. Relations with banks and financial institutions fell to 48.3 points, relations with government authorities dropped to 49.7 points, and the indicator for relations with foreign partners plunged 4.7 points to 45.3 points. The share of negative responses in the latter category rose from 1.1% to 6.7%.
The financial markets index reversed its April gain, falling 3.2 points to 43.4 points. The share of companies reporting a worsening financial position rose to 29.3% from 21.3% in April, pushing that sub-index down 3.3 points to 40 points. The currency market indicator, which had reached a one-year high in April, dropped 4.9 points, with 12% of companies reporting a deterioration compared to just 4.5% a month earlier. Stock market assessments also worsened moderately.
In a partial bright spot, the personal assessment index continued to rise, adding 1.1 points to reach 39 points, as the share of respondents giving negative personal evaluations fell from 30.3% to 26.7%.
Investment and Social Activity Remain Stable but Hiring Slows
On the investment front, two-thirds of surveyed companies continued to carry out investment programs in May, unchanged from previous periods. Among those, 62% kept projects on budget and schedule, while 26% fell behind schedule and 18% reduced their investment budgets. Only 6% moved ahead of schedule, and 10% managed to increase investment spending.
Hiring activity dropped significantly, with only 68% of companies recruiting new staff, down 10.7 percentage points. At the same time, 20% of organizations laid off workers, and 20.3% implemented working-hour reductions to cut costs — both figures representing an increase from previous months.
Social programs for employees remained widespread, operating at 84% of companies, while programs supporting other categories of citizens were in place at 57.3% of firms. Among employee-focused social benefits, the most common were voluntary health insurance (73%), paid vouchers for sanatorium treatment and children’s holidays (68.3%), additional payments not required by labor law (66.7%), meal subsidies (63.5%), transport or commute assistance (57.1%), housing programs including mortgages (44.4%), and supplemental pension insurance (20.6%). Additional voluntary measures reported by some companies included support for young employees, corporate sports and cultural events, accident insurance, gym memberships, support for motherhood and large families, gifts for employees’ children, assistance for veterans and retirees, vocational training, and extra vacation days.
Two-thirds of companies maintaining social programs kept their budgets unchanged, while 27% increased spending and 6.3% cut back. Additional measures to reduce labor market tensions were implemented by 66.7% of firms, including internships (44%), advanced training for employees (40%), and temporary employment programs (22.7%).