Productivity in Russia increased by 1.4% year-on-year in the first half of 2025, primarily due to government contracts for enterprises related to the military-industrial complex. This was reported by the Ukrainian Foreign Intelligence Service.
According to the SBU, the highest growth was recorded in the production of special vehicles (3.4 times more compared to 2022), electronics and optics (2.1 times), and metal products (1.5 times).
'The only segment that is growing in the civilian sector is funeral services. Against the backdrop of demographic decline and losses in the war against Ukraine, the industry grew by 16% over six months, with its volume for January-April reaching almost $425 million,' the intelligence service noted.
At the same time, other sectors of the civilian industry, on the contrary, are showing a decline. In June, the overall industrial production index fell by 1.9%. The most significant drop was observed in the production of civilian transport (-26.8%), electronics (-8.6%), and leather goods (-4.7%).
Decline of Industrial Optimism in Russia
In July, the industrial optimism index fell below the levels of 2016 and 2022. 61% of surveyed experts indicated 'significantly below normal' production volumes. The balance of expectations regarding output became negative - for the first time since August 2022. Against the backdrop of a decline in the automotive market, KamAZ, following GAZ and AvtoVAZ, is moving to a four-day work week. At the same time, sunflower oil exports decreased by 38% year-on-year. The number of companies planning to cut staff has doubled: from 6.9% in January to 11.5% in June. The most significant declines are in mining, machine engineering, and pharmaceuticals,' the SBU reported.
It was emphasized that the current dynamics indicate deep structural imbalances that threaten technological lost potential in the civilian sector.
The situation in industrial production in Russia showed mixed results. In the military sector, there is positive dynamics, especially in the production of special vehicles and electronics, while in the civilian sector, the situation is not as high, with declines in production across various industries. There is also a decline in industrial optimism, which may indicate a complicated economic situation in the country.