Russian Service Sector Contracts Further In June

(RTTNews) - Russia's services activity deteriorated at the fastest pace in nine months as weak client demand led to sharper declines in output and new orders, survey results from S&P Global showed on Friday.

The services purchasing managers' index, or PMI, dropped to 48.2 in June from 48.7 in May. Any score below 50 suggests contraction in the sector.

The decrease in services activity was attributed to subdued customer demand and a sustained contraction in new orders, which fell at the fastest pace since December 2022, the survey said.

Consequently, companies reduced their workforce numbers further, and the rate of job shedding was the steepest in three-and-a-half years.

On the price front, input price inflation eased to the lowest in this year so far from January's VAT-driven peak. As a result, selling price inflation softened to the weakest since January 2021 amid efforts to boost sales by discounting.

Looking ahead, although the degree of confidence in the outlook for output improved, it picked up only slightly from May's near three-and-a-half-year low.

The composite output index decreased to 48.9 in June from 49.2 in May, signaling a modest decline in the Russian private sector activity.