The start of the year witnessed a significant expansion in the Russian services industry. This was propelled by a steep increase in new orders, suggestive of robust demand conditions, as revealed by S&P Global's survey results.
The Manufacturing Purchasing Managers' Index (PMI) experienced a drop in January, declining to 55.8 from the December reading of 56.2. However, considering that any reading above 50 signifies expansion in the sector, the industry still showed growth.
January also observed a sharp rise in new orders. This was credited to successful advertising campaigns coupled with a continued improvement in demand conditions. Despite some challenging economic situations in several key export markets, new export orders experienced growth for the ninth consecutive month, although the pace was slowest since last August.
On the costs side, input price inflation remained high because of an increased burden from electricity and supplier costs, along with reports of climbing wage bills. Consequently, selling prices witnessed the quickest rise in the past three months.
Driven by the pressure of handling increasing new orders, companies had to upscale their staff strength for the sixth month in a row. The composite output index slightly fell in December to 55.1 compared to 55.7 in November, in spite of this, indicating a strong upswing in business activity across the private sector.
