MOSCOW (Reuters) -Russia’s services sector stabilised in August after two months of contraction, with employment growing at the fastest pace since February, S&P Global reported on Wednesday.
The S&P Global Russia Services PMI Business Activity Index rose to 50.0 in August from 48.6 in July, indicating unchanged activity levels. A reading above 50.0 signals growth, while below indicates contraction.
New orders continued to decline, but the pace was only slight, marking an improvement from July’s sharper fall. Companies linked the decline to challenging financial conditions and customer hesitancy.
“Although some companies continued to highlight subdued demand conditions, there were signs that a slower fall in new business contributed to a stabilisation in output,” S&P Global said.
Despite subdued demand, service providers increased staffing, anticipating future sales growth. The rise in employment, while modest, was nevertheless the quickest since February, helping firms manage their backlogs of work.
Cost pressures eased, with input prices rising at the slowest rate in over five years, aided by favourable exchange rate movements. However, firms accelerated the pace of output charge inflation, passing higher costs onto customers.
Business confidence remained positive but dipped to its second-lowest level since July 2023, with hopes pinned on stronger demand and market expansion.
A sister survey last week showed that activity across Russia’s manufacturing sector declined for the third month running in August, driven by falls in output and new orders.
(Reporting by Gleb Bryanski; Editing by Hugh Lawson)
