Russia: Services and Composite PMIs edge down in February
The IHS Markit Russia Services Business Activity Index fell to seven-month low of 52.0 in February, from 54.1 in January. Nevertheless, the index remained above the critical 50-threshold, signaling sustained improvement in business activity across the Russian service sector thus far in Q1 2020.
The moderation was largely driven by weaker growth in demand amid faltering domestic sales. Furthermore, the rate of service sector job creation eased in February, as backlogs of work contracted further. Meanwhile, inflationary pressures eased further, with output prices declining at the fastest rate since October 2009. On a more positive note, business sentiment regarding future output improved slightly in the surveyed month.
In a similar fashion, the Russia Composite Output Index edged down to 50.9 in February, from 52.6 in the opening month of 2020. Commenting on composite result, Sian Jones, an economist at IHS Markit, noted:
“Much like their manufacturing counterparts, service providers saw historically muted increases in costs burdens midway through the first quarter. Reflecting this, greater competition led to a decline in service sector output charges amid efforts to retain and attract clients. Our latest forecasts point towards economic growth of 1.9% in 2020, with the overall expansion set to accelerate from the recently-released figure of 1.3% in 2019. That said, headwinds in the global economy could present downside risks to this forecast as the year progresses.”