Russia: Services PMI edges down in February
The IHS Markit Russia Services Business Activity Index fell to 52.2 in February, from a four-month high of 52.7 in January. As a result, the index remained above the critical 50-threshold, suggesting that operating conditions across the Russian services sector continued to improve in February, albeit at a softer pace than at the outset of the year.
February’s moderation came chiefly on the back of a slower increase in new orders. Flagging new business growth came amid continued fall in new exports orders and a somewhat stagnant domestic client demand. That said, services providers increased their payroll numbers at quickest pace in over a year, leading to another drop in the level of outstanding business. More positively, business sentiment strengthened, rising to pre-pandemic levels. Lastly, input cost inflation rose in Febraury, thus prompting a hike in output charges.
Meanwhile, the IHS Markit Composite Output Index rose to 52.6 in February from 52.3 in January, amid the narrowing gap between operating conditions in the manufacturing and the services sectors.
Commenting on the composite result, Sian Jones, an economist at IHS Markit, said:
“Cost pressures continued to put strain on margins, as input prices rose markedly once again. Firms responded by hiking their selling prices, however. Historically subdued demand conditions across the private sector hampered the pace of recovery, however, and in part led to a moderation in output expectations among service providers. Nonetheless, we expect business activity to pick up through the year, with our current forecast anticipating that the economy will expand by 2.1% in 2021.”