Growth rates of business activity in the services sector slowed down in Russia – Kommersant

The S&P Global agency recorded a decrease in the business activity index (PMI) in the service sector of the Russian Federation from 56.8 points in June to 54 points in July. A reading above 50 indicates an increase in economic activity.

S&P Global noted a solid increase in services sector output, although it is the slowest since February (.pdf). Firms attributed the increase in activity to the growth in the number of new businesses and the expansion of the customer base.

The rise in total new orders was dampened by “stagnation in new export sales as demand from foreign customers declined.” This happened after two months of sharp growth. Firms often noted that growth was hindered by logistical problems. The increase in realized prices increased due to higher prices by suppliers and the depreciation of the ruble against the dollar, which led to an increase in the cost of imported goods, S&P Global said.

Business confidence remains strong due to planned investments to attract new customers and expand the product range. However, the agency notes that the level of positive sentiment was weaker than the June indicator and the long-term average.

S&P Global previously fixed a decrease in the growth rate of business activity in the manufacturing industries from 52.6 to 52.1 points. The agency called it the weakest growth in the sector since September 2022.

Leonid Uvarchev