(Reuters) -Russia's services sector slumped into a contraction in June for the first time in a year, as slower growth in new orders led companies to cut output, a business survey showed on Thursday.
Russia's Services Sector Experiences First Contraction in a Year
(Reuters) -Russia's services sector slumped into a contraction in June for the first time in a year, as slower growth in new orders led companies to cut output, a business survey showed on Thursday.
The S&P Global Purchasing Managers' Index (PMI) for Russia's services sector fell to 49.2 last month from 52.2 in May, moving below the 50 mark that separates expansion and contraction for the first time since June 2024.
"The fall in output was linked to a less marked upturn in new orders and more subdued client demand," S&P Global said. "The rate of decline was only slight, but it nevertheless compared unfavourably with the solid pace of growth seen on average over the series history."
Firms linked higher operating expenses to increased supplier prices and wage bills, the survey showed. Employment in the sector contracted for the third time in four months, with companies often not replacing voluntary leavers.
New export business, which had contracted for a year after Moscow invaded Ukraine in February 2022, expanded for the eighth successive month in June, the survey showed, with panellists reporting stronger demand in existing markets.
Business confidence dipped to its lowest since July 2023, as firms expressed concerns over headwinds to the sales environment despite hopes for new client wins and greater customer referrals.
A sister survey published on Tuesday showed that Russia's manufacturing sector contracted at its sharpest rate in more than three years in June as output, new orders and employment all slumped.
(Reporting by Alexander Marrow; Editing by Hugh Lawson)
