Daily Management Review

Russian Services Sector Experienced Highest Output Growth In Over A Year, Shows PMI Data


Russian Services Sector Experienced Highest Output Growth In Over A Year, Shows PMI Data
According to a business poll released on Wednesday, Russia's services industry rose at its highest rate in more than a year in July, as strong domestic demand outpaced declining export orders for Russia's increasingly isolated industries.
The S&P Global Purchasing Managers' Index (PMI) rose to 54.7 in July, its highest since June 2021 and up from 51.7 in June this year, pulling further clear of the 50 mark that denotes expansion.
"The rate of output growth was the fastest for just over a year, with activity supported by a sharper upturn in new business," S&P Global said in a statement.
"Stronger customer demand was confined to the domestic market as new export orders fell substantially in July. The ongoing impact of sanctions reportedly dampened foreign client demand."
Russia's economy has been battered by Western sanctions imposed in response to Moscow's actions in Ukraine, with international trade drying up as foreign clients turn away.
Service providers passed on rising expenses to customers, and average cost burdens increased even more in July.
Business optimism increased, with many citing hopes for improving economic health and more customer demand, and while enterprises increased recruiting activities in July, backlogs of work increased sharply.
"The rate of growth in incomplete business was the sharpest since November 2003, as firms cited greater new business, challenges finalising contracts and input shortages as driving factors behind the increase," S&P Global said.
According to a sister poll released this week, Russia's manufacturing sector remained stable in July, despite the sector's continued struggles with falling exports and logistical issues in the face of Western sanctions.