Russian services sector slips back into contraction in August -PMI
2022.09.07 00:37
MOSCOW (Reuters) – Russia’s service sector inched back into contraction in August, with broadly unchanged levels of output, a business survey showed on Monday, as consumer demand waned and firms reduced workforce numbers.
The S&P Global (NYSE:SPGI) Purchasing Managers’ Index (PMI) fell to 49.9 in August, down from 54.7 in July and slipping just below the 50 mark that separates contraction from expansion.
“Where service providers reported a decrease in output, this was linked to reduced purchasing power at some customers and the impact of sanctions,” S&P Global said in a statement.
New export orders fell sharply and firms reduced their workforce numbers, partly as a way to cut costs.
Concerns over inflation and consumers’ purchasing power led to a reduction in business expectations, which slipped to their lowest in four months, but remained elevated on hopes of greater economic stability.
“The rate of cost inflation quickened to the sharpest since May and remained historically elevated,” S&P Global said.
A sister survey last week showed that activity in the Russian manufacturing sector increased in August at the fastest rate since January.
The manufacturing sector registered six months of contraction that began in February, when Russia sent tens of thousands of troops into Ukraine, triggering unprecedented western sanctions on Moscow.
