Russian Service Sector Downturn Eases In July

(RTTNews) - Russia's services activity deteriorated at the slowest pace in three months in July, survey results from S&P Global showed on Wednesday.

The services purchasing managers' index, or PMI, rose to 49.0 in July from 48.2 in June. Nonetheless, any score below 50 suggests contraction in the sector.

The overall downturn in July was linked to weak client demand and a further decline in new business inflows, which fell for the fourth successive month. However, the rate of decline in new orders was the slowest in three months.

Russian service providers reduced their workforce numbers further in July, reflecting the non-replacement of voluntary leavers and shorter working hours in response to weak demand.

On the price front, input price inflation accelerated as operating expenses increased due to fuel shortages, which pushed up supplier and logistics costs. As a result, selling prices rose at a faster pace, although the rate of inflation remained historically muted.

Looking ahead, the level of business optimism ticked up but remained well below the series trend.

The composite output index rose to 49.6 in July from 48.9 in June, indicating a marginal contraction in the Russian business activity. Although manufacturers recorded a sustained expansion in production, output declined further at service sector firms.