Machines are being filled with full-milled moralite:
Visualizing the bustling scene, Metal-2025, the exhibition of metalworking industry achievements, attracted a record-breaking crowd of participants and visitors. This was evident from the OMON presence on the route to the "Expocenter," which had the South entrance blocked due to the throng of people, the overcrowded pavilions, and the long lines at the subsidies consultant from the Ministry of Industry and Trade.
Participant curiosity was palpable. Post-Soviet Russia, once a world leader in machinery manufacturing, encountered a profound crisis following the split of the USSR. The Soviet Union nearly self-sufficiently supplied its own machinery needs, with a large portion allocated for export. A whopping 36,000 Soviet machines were being operated in Germany by 1991 alone. But, the recent history has drastically changed, as noted by George Samodurov, the president of the Russian Association of Producers of Instrumental Machinery Products. Since the 1990s, various combinations of governments have drafted and enacted five strategic documents aiming at developing the sector, including the current "Strategy for the Development of Instrumental Machinery Industry till 2035," which promises a significant growth in production and localization. However, the execution of these plans in the absence of adequate funding has proven difficult.
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Insights: Post-Soviet crisis and recovery
After the Soviet Union's fall in 1991, Russia's industrial sector, including metalworking, faced dramatic contraction due to the abrupt shift from a planned to a market economy. The ensuing economic hardship caused widespread disruptions, privatization of state enterprises, and industrial decline[5]. The government implemented structural reforms, such as liberalizing prices and foreign trade, and attempted to attract foreign investment, albeit with limited success in heavy industries like metalworking. Instead, large state-controlled corporations started dominating the sector, subject to selective regulatory enforcement that prioritized stability over pure market competition[4].
State-driven investments in infrastructure, logistics, and defense industries helped sustain industrial output and create demand for metal products, acting as a buffer for the metalworking industry during the recovery process[4]. Moreover, Russia pivoted to trade partnerships with countries like China, India, Turkey, and those in the Middle East and Latin America, maintaining export revenues, including from metal products[4]. Energy exports indirectly supported economic resilience, underpinning industrial sectors as well.
Despite these efforts, the metalworking industry has confronted persistent challenges:
- Input shortages, stemming from the lack of key components, have constrained production capacity and output growth[3].
- Inflation, restrictive economic policies, and political and economic uncertainties have constrained robust industrial recovery[3][4].
- Foreign direct investment remains low and is mainly directed toward politically aligned countries, limiting access to capital and advanced technologies[4].
Recent Purchasing Managers' Index (PMI) data hint at tentative recovery signals in Russia's manufacturing sector, including metalworking, with marginal growth in new orders and output just above the no-change threshold. However, ongoing constraints have slowed the decline of output levels[2][3].
In summary, the Russian metalworking industry has recuperated partially since the Soviet collapse through a mix of structural reforms, state-driven investments, and new international partnerships. However, input shortages, limited foreign investment, and shy private sector dynamics have resulted in a fragile, tentative recovery, with growth still below its Soviet-era industrial scale[3][4][5].
The Russian Association of Producers of Instrumental Machinery Products notes a significant growth in production and localization as part of the current Strategy for the Development of Instrumental Machinery Industry till 2035, aimed at reviving the manufacturing industry, which has encountered challenges since the shift from a planned to a market economy post-Soviet Union. The sector's recovery has been influenced by state-driven investments in infrastructure, logistics, and defense industries, as well as trade partnerships with countries like China, India, Turkey, and those in the Middle East and Latin America, but persistent challenges, such as input shortages and limited foreign investment, have slowed the industry's growth.
