In February, the growth of Russian service activities recorded its slowest pace in over a year due to milder demand conditions as per a survey from S&P Global. The Services Purchasing Managers' Index (PMI) slipped to 51.1 from 55.8 in January, although the score above 50 still signals industry expansion.
This relatively feeble uptick in performance represents the poorest show of output amidst a 13-month growth period. A downturn was also noticed in new orders, reaching a 13-month low due to decreasing demand. International orders grew at a more leisurely pace due to logistical issues that hindered overseas clients from placing their orders.
Concerning price dynamics, the inflation of input prices receded to its least rate since July 2020, which can be attributed to a reduction in supplier and transportation costs. This reduction led to charge inflation marking its slowest rise since March 2023.
Employment saw only a marginal boost in February due to various challenges such as retaining staff and slower order growth which prevent businesses from filling the vacancies left by voluntary resignations. Nevertheless, Russian service providers remain hopeful about the output outlook over the upcoming year, largely due to anticipated investments in expanding their customer base.
The composite output index saw a fall in February, moving from 55.1 in January to 52.2, marking the slowest growth of private sector activity in over a year. Although manufacturers noted a more rapid increase in production, the overall performance of the private sector was hindered by the slower growth of the service sector.
