Growth in Russia’s services sector slowed to a three-month low in December due to weakening demand and increasing cost pressures, S&P Global reported on Saturday.
The S&P Global Russia Services PMI Business Activity Index dropped to 51.2 in December, down from 53.2 in November. This marks the sixth consecutive month of expansion, though at a reduced pace. A PMI reading above 50 indicates growth, while a reading below 50 suggests contraction.
While new orders continued to rise, the pace of output growth decelerated, with respondents citing subdued customer demand as a key factor.
New business growth persisted, albeit more slowly than in November, supported by stronger client demand and new customer acquisitions.
Employment growth picked up, with workforce numbers increasing at the fastest rate in four months to handle rising backlogs. These backlogs accumulated at the steepest rate in 16 months, reflecting challenges in managing sustained inflows of new business.
Cost inflation accelerated, driven by unfavorable exchange rate fluctuations and higher supplier prices, reaching its highest level since January. However, firms tempered their price increases, resulting in the slowest rise in selling prices since August, as they sought to absorb some of the higher costs.
Business confidence declined to its lowest point since July 2023, with firms maintaining optimism about future activity but expressing concerns about rising cost pressures.
The broader private sector also experienced a deceleration, with the composite PMI Output Index falling to 51.1 in December from 52.6 in November, reflecting slower growth across both the manufacturing and services sectors.
