Russia: Services PMI hits seven-month high in March
The IHS Markit Russia Services Business Activity Index jumped to 55.8 in March, from 52.2 in February, marking the best reading in seven months. As a result, the index moved further above the critical 50-threshold, suggesting that operating conditions across the Russian services sector improved at a quicker pace at the end of Q1.
March’s upturn was chiefly driven by a broad-based pick up in new orders. Easing Covid-19-related restrictions buoyed client demand at home, driving the strongest increase in new business since August 2020. Moreover, new export orders rose for the first time in over a year and at the sharpest pace since October 2019, thus further bolstering the overall result. In turn, output among services providers rose at a solid pace, employment levels increased for the second consecutive month and backlogs of work continued to fall in March. Lastly, despite retreating slightly, business confidence remained upbeat at the end of Q2, although cost inflation jumped to an over two-year high, in turn keeping margins under pressure.
Meanwhile, the IHS Markit Composite Output Index rose to 54.6 in March, from 52.6 in February.
Commenting on the composite result, Sian Jones, an economist at IHS Markit, said:
“At the composite level, service sector firms drove the overall upturn in private sector activity, as manufacturers lost some growth momentum. Encouragingly, greater business activity at service providers also led to an increase employment. Pressure on capacity was reduced once again, as service sector staffing numbers increased at the quickest pace since November 2019.”