Russia: Services PMI remains close to one-year high in November, while the Composite PMI dips
The IHS Markit Russia Services Business Activity Index came in at 55.6 in November, broadly unchanged from October’s one-year high of 55.8. As a result, the index remained well above the critical 50-threshold, signaling a sustained improvement in business activity across the Russian service sector. The result chiefly reflected strong new orders growth amid booming domestic demand which more than offset a dip in foreign business. In turn, the growth of output among services providers was the second-fastest in a year in November, while firms also recorded a further increase in workforce numbers. That said, sentiment over future outlook dropped to the lowest point in over a year, amid lingering economic uncertainty and concerns over softer client demand.
Meanwhile, the Russia Composite Output Index fell to 52.9 in November from 53.3 in October. The result points to Russia increasingly turning into a two-speed economy, amid divergent dynamics in the services and manufacturing sectors. Commenting on the report, Sian Jones, an economist at IHS Markit, noted that the Central Bank is likely to continue its monetary policy easing cycle against the backdrop of frail demand dynamics:
“At the composite level, inflationary pressures softened further in November, suggesting that the Central Bank of Russia may look to reduce the key rate again in due course amid muted price increases and historically modest client demand across the private sector.”