Financial News: Russian Services Activity Regains Strength In February

Russian Services Activity Regains Strength In February

03/03/2023 - 03:32:00 (RTTNews)

(RTTNews) - Russia's service sector activity expanded for the first time in five months in February amid a renewed increase in new orders and a favourable outlook for the coming year, survey results from S&P Global showed on Friday.

The Services Purchasing Managers' Index, or PMI, rose to 53.1 in February from 48.7 in the previous month.

A score above 50 suggests expansion, while any reading below 50 indicates contraction in the sector.

New orders grew at the sharpest rate since August 2022, boosted by the acquisition of new customers and greater interest from clients amid reduced uncertainty.

However, new export orders contracted further in February, reflecting a reduced customer base due to the impact of sanctions and greater competition for clients. On a positive note, the rate contraction was the slowest in the current 12-month sequence of decline.

On the price front, input price inflation slowed to the lowest since August 2021. Despite this, cost burdens have remained historically elevated due to hikes in supplier prices, greater wage bills and unfavourable exchange rate movements.

At the same time, output charges rose at a quicker rate in February.

Strong demand conditions resulted in the expansion of employment for the first time in seven months, though slightly.

Russian service providers showed optimism towards the year-ahead outlook for activity. The degree of confidence surged higher and was the strongest since July 2022 amid hopes of greater client demand and the introduction of new service lines.

The composite output index posted 53.1 in February, up from 49.7 in January. The solid expansion in the private sector was driven by a renewed rise in service sector output and a quicker upturn in manufacturing production.

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