Russia PMI February 2024

Russia: Russia’s service sector growth slows in February amid weakened demand

The S&P Global Russia Services Purchasing Managers’ Index (PMI) fell to 51.1 in February from 55.8 in January, indicating a weaker growth momentum compared to January. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in services sector operating conditions compared to the previous month.

The deceleration in the service sector’s growth was primarily due to a softer increase in new orders which reflects weakened demand conditions. The most modest new business growth in over a year, has led companies to scale back their hiring, resulting in only a fractional growth in employment. The slower pace of new orders has directly impacted output growth, which marked the weakest upturn in the current 13-month growth sequence. Notably, logistical issues have contributed to a slower expansion in new export orders, further dampening the sector’s performance.

On the pricing front, input costs have risen at the slowest pace since July 2020, attributed in part to reduced supplier and transportation costs. Consequently, service providers have moderated the increase in output charges, leading to the slowest rate of selling price inflation since March 2023. Meanwhile, business sentiment remained relatively optimistic, with firms expressing confidence in future output, partly due to planned investments aimed at expanding customer bases.

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