Russia: Services PMI eases, but remains elevated in June
July 6, 2021
The IHS Markit Services Purchasing Managers’ Index (PMI) came in at 56.5 in June, down from May's 57.5. Consequently, the index remained entrenched above the 50-threshold, signaling a stronger improvement in business conditions from the previous month.
The soft downturn came on the back of cooling momentum in output and new orders growth. That said, conditions remained upbeat overall, with stronger client demand, with new export orders rising at the quickest rate for just over two years and firms expanding their workforce numbers at the strongest pace since May 2011 in a bid to easy pressure on capacity. Lastly, business confidence shot up to its highest since May 2019, despite historically elevated cost pressures.
Meanwhile, the IHS Markit Composite Output Index came in at 55.0 in June, compared to 56.2 in May.
Commenting on business sentiment, Sian Jones, an economist at IHS Markit, said:
"Despite recently reimposed COVID-19 restrictions following a rise in virus case numbers, firms were upbeat regarding the year-ahead outlook. In fact, service providers hired new staff at the quickest pace in just over a decade. Much like in the manufacturing sector, cost pressures at service providers remained marked amid further hikes in supplier prices. Although the Central Bank of Russia raised interest rates in its latest meeting, we forecast further increases in the policy rate before the end of 2021."