Western Sanctions Cause Production Cut in Russia

Russian factories cut production and employment in March after imposing the USA and its allies adopted some of the most severe economic sanctions were taken against Russia after the country invaded Ukraine.

The survey of purchasing managers at Russian manufacturing companies conducted by data firm S&P Global recorded a sharp rise in prices and a big fall in new orders. Western sanctions have effectively severed Russia from international finance and barred it from importing key technologies.

According to the survey, the Purchasing Index of S&P Global for the manufacturing sector of Russia has also fallen to 44.1 in March from 48.6 in February, recording its largest drop in activity since May 2020. 

Russian investigations suggest that Western sanctions and mass outflows of Western businesses from the country have the intended effect. According to the Yale School of Management, nearly 500 international companies have closed or suspended their businesses in Russia since the invasion of Ukraine.

Sanctions imposed by western companies have deprived many Russian factories of the parts they need for the manufacturing of their products. The Russian automobile AvtoVAZ also stopped the production of its Lada automobiles due to the ongoing shortages.