Russian service sector records fastest production growth in over a year: PMI


MOSCOW—Russia’s services sector expanded at its fastest pace in more than a year in July, a business survey showed Wednesday, as strong domestic demand pushed export orders for Russia’s increasingly isolated firms. This is because it outweighed the decline in

The S&P Global Purchasing Managers Index (PMI) rose to 54.7 in July. This is the highest since June 2021, up from 51.7 in June this year and further above the 50 mark, which indicates expansion.

“Output growth was the fastest in just over a year, supported by a sharp rise in new business,” S&P Global said in a statement.

“Customer demand was limited to the domestic market as new export orders dropped significantly in July. The continued impact of sanctions has reportedly weakened demand from foreign customers. “

The Russian economy has been hit by Western sanctions against Russia over its actions in Ukraine, and international business is drying up as foreign customers turn away.

Average cost burden rose further in July as service providers passed on higher costs to their clients.

Confidence improved, with many businesses citing hopes for broader economic health and improved customer demand. Enterprises stepped up their hiring efforts in July, but the backlog of jobs increased sharply.

According to S&P Global, “The imperfect business growth rate was the steepest since November 2003. Firms attributed the increase to larger new business, challenges to securing deals, and increased input. I’m pointing out a shortage of things,” he said.

Russia’s manufacturing sector remained stable in July as it continues to struggle with diving exports and logistics problems in the face of Western sanctions, according to a sister survey this week.

Reuters

follow

Posted on