2023.06.0509:16:00UTC+00Russian Services Activity Maintains Solid Expansion

Russia's service sector activity continued to expand strongly in May, underpinned by a sustained rise in new orders, survey results from S&P Global showed on Monday.

The Services Purchasing Managers' Index, or PMI, dropped to 54.3 in May from 55.9 in the previous month. However, any reading above 50 indicates expansion in the sector.

Although the slowest in three months, the rate of growth was slightly stronger than the series trend, the survey said.

New orders grew for the fourth successive month in May on the back of greater client demand and a wider range of project opportunities. Nonetheless, the rate of increase eased further.

The growth in new export business was the quickest in almost two years, in contrast to the marginal decline seen a month ago.

On the price front, overall input price inflation was sharp in May due to higher supplier prices alongside greater wage and utility bills. Nevertheless, the rate of increase was the second-slowest since January 2021. Despite this, service providers raised output charges at a moderate pace.

Employment rose for the fourth successive month as a result of another upturn in business requirements and new orders. Although the pace of job creation eased, it was solid overall and the second-sharpest since June 2021.

In this year's outlook, companies remain optimistic about output after further upticks in demand and marketing investment.

The composite output index posted 54.4 in May, down from 55.1 in April, reflecting a solid expansion in private sector business activity.