Russia: Services PMI picks up in May
June 3, 2021
The IHS Markit Services Purchasing Managers’ Index (PMI) rose to 57.5 in May from April's 55.2. May's result marked the best performance since August 2020. As a result, the index moved further above the 50-threshold, signaling a faster improvement in business conditions compared to the previous month.
The upturn was chiefly driven by sturdier new orders growth, largely stemming from the easing of lockdown restrictions at home which shored up confidence and spurred consumer spending in turn. On top of that, new export orders continued to increase in May, albeit at a softer clip than in April. Meanwhile, the pace of job creation gained steam in May, leading to a notable drop in the backlogs of work. On a less positive note, cost pressures continued to mount in May, with input price inflation accelerating to a near 13-year high, which weighed on business sentiment in turn.
Meanwhile, the IHS Markit Composite Output Index rose to 56.2 in May, compared to 54.0 in April.
Commenting on business sentiment, Sian Jones, an economist at IHS Markit, said:
"Business confidence for the year ahead was knocked midway through the second quarter, as firms expressed concerns regarding inflation and the ability of customers to pay higher prices for goods and services. Our current forecast projects a 3.1% expansion in GDP in 2021."
Author: Almanas Stanapedis, Research Team Manager