Russian Defense Industry Sees Sharp Production Decline After Three Years of Growth

Russia’s defense industry is showing signs of exhaustion – despite the rapid expansion that followed the country’s full-scale invasion of Ukraine.

According to The Moscow Times, in September 2025, output in the category that includes tanks and other armored vehicles grew by just 6% year-on-year – a sharp slowdown from the 61.2% surge recorded in August.

“The production of finished metal products, which grew by 26.4% in 2023 and 31.6% in 2024, and was still showing a +21.2% increase in August, unexpectedly turned negative in September, down 1.6% year-on-year,” the outlet reports.

Compared to August, output dropped by 20%. Production of metalworking products, a key component of the military industry, also declined by 6%.

It is also reported that after trillions of rubles in injections into the sector, Russia is finding it increasingly difficult to sustain the pace of defense production. Among the main reasons are a shortage of skilled labor, sanctions restricting the import of technology and components, and the forced simplification of products to achieve higher output volumes.

Overall, Russia’s manufacturing sector is also showing signs of decline: 18 out of 24 industries – accounting for about 80% of total industrial production – are currently in recession.

Russia’s industrial sector, which accounts for about 30% of the country’s GDP, has effectively come to a halt: in September, growth was recorded at just +0.3% year-on-year, compared with +5.6% a year earlier.

Civilian industries are also steadily contracting – by September 2025, output had fallen by 1.1%.

“The manufacturing industry – the largest sector of Russia’s economy – saw its slowest growth since early 2023 last month,” Denis Popov, chief analyst at Promsvyazbank, stated.

Thus, the entire defense industry no longer allows Russia to effectively sustain its war machine. An equally significant factor is the strikes on oil refining and chemical infrastructure, which have triggered a chain of economic consequences.

In July 2025, it was reported that Belarus was accelerating the development of electronics and component production used in Russian cruise missiles and drones. Following Russia’s full-scale invasion, demand for Belarusian defense technologies surged sharply amid the international sanctions imposed on Russia.