Russia's service sector deterioration eased at the end of the year, as both output and new orders fell only marginally despite the weaker demand conditions in domestic and foreign?markets, survey results from S&P Global showed on Friday.
The Services Purchasing Managers' Index, or PMI, rose to 48.7 in January from 45.9 in the previous month. However, any reading below 50 indicates contraction in the sector.
In January, the Russian service providers experienced a further fall in new business due to weak client demand. Nonetheless, the latest decline was modest overall amid the aggressive marketing efforts.
The survey also revealed that the customer demand in the export market remained muted at the start of the year.
On the price front, input price inflation was marked in January and accelerated to a 5-month high, linked to higher utility, supplier, and wage bills.
Output price inflation, on the other hand, slowed from December to be one of the slowest in two years, as weak demand conditions and fierce competition forced firms to moderate price increases.
Employment in the sector decreased for the sixth consecutive month, though the rate of job shedding was the weakest since September 2022.
Looking ahead, Russian service providers were more optimistic about output expectations in the next twelve months amid hopes of a boost to new sales following spending on advertising campaigns, the acquisition of new customers, and greater investment in new products.
The composite output index posted 49.7 in January, up from 48.0 in December. The overall downturn in the private sector was driven by a further decrease in service sector output, which counteracted an expansion in manufacturing production
