Russia's services sector contracts for first time in six months, PMI shows

Russia's Services Sector Sees First PMI Contraction in Six Months in March

March 2024 Russia Services PMI Report Overview

PMI Contraction and Demand Trends

MOSCOW, April 3 (Reuters) - Russia's services sector contracted in March for the first time in six months as demand softened and new orders broadly stalled, a business survey showed on Friday.

The S&P Global Russia Services PMI Business Activity Index fell to 49.5 in March from 51.3 in February, dropping below the 50 mark separating growth from contraction.

New Business and Market Uncertainty

New business was broadly unchanged after four months of expansion, as some firms cited lower client purchasing power, greater uncertainty and lost work linked to the war in the Middle East.

Employment and Staffing Trends

Employment fell for a second straight month and at the quickest pace since January 2023, as companies cut staff amid cost considerations and subdued sales.

Inflation and Price Pressures

Input Cost and Selling Price Inflation

Price pressures eased further from January's VAT-driven highs. Input cost inflation slowed for a second month but remained among the fastest since the start of 2025, while selling price inflation cooled to a three-month low.

Backlogs, Business Confidence, and Composite Output

Work Backlogs and Optimism

Backlogs of work rose for a sixth month, although the pace of accumulation slowed. Firms were more optimistic about output over the next 12 months than in February, but confidence levels remained among the lowest seen in more than three years.

Composite PMI Output Index

The S&P Global Russia Composite PMI Output Index fell to 48.8 in March from 50.8 in February, signalling a renewed decline in private sector activity as manufacturing and services output both contracted.

Reporting and Editorial Credits

(Reporting by Gleb Bryanski; Editing by Hugh Lawson)