Funeral Industry Becomes Russia’s Only Growing Civilian Sector in 2025
Russia’s economy continues to shift toward wartime priorities in 2025, with defense-related industries driving nearly all industrial growth. While overall industrial output grew by 1.4% year-on-year in the first half of 2025—thanks to state orders for military-linked enterprises—the only civilian sector showing notable expansion is the funeral industry.
According to official data, funeral services grew by 16% in the first six months of the year, reaching nearly $425 million in revenue by April. This surge comes amid mounting war casualties and accelerating demographic decline, The Gaze reports, citing the Foreign Intelligence Service of Ukraine.
In contrast, other civilian sectors are in retreat. In June alone, industrial production dropped by 1.9%, with steep declines in civil transport manufacturing (-26.8%), electronics (-8.6%), and leather goods (-4.7%).
Indicators of industrial sentiment have also plummeted. In July, the industrial optimism index fell below levels recorded in 2016 and 2022. 61% of surveyed experts reported output levels “significantly below normal,” and for the first time since August 2022, the balance of expectations turned negative.
Major manufacturers are scaling back operations. KamAZ joined GAZ and AvtoVAZ in switching to a four-day work week. Exports of sunflower oil dropped 38% compared to the previous year, and the share of companies planning staff cuts nearly doubled—reaching 11.5% in June, up from 6.9% in January. The hardest-hit sectors include resource extraction, machinery, and pharmaceuticals.
Experts warn that these dynamics point to deep structural imbalances and a growing risk of long-term technological stagnation in Russia’s civilian economy. In response, lawmakers in the State Duma have proposed punishing citizens for “discrediting” domestic products, branding criticism as unpatriotic.
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