Services Sector Expands at Slower Pace in February

Russia’s service sector expanded in February but at a slower pace than the previous month amid softer growth in domestic demand, the Markit purchasing managers index (PMI) showed on Wednesday.

The index’s headline figure declined to 52.0 from 54.1, staying above the 50 mark that separates expansion from contraction, as it has been since July.

“(There was) a faster rise in export orders contrasting with a weaker expansion in overall new business,” said Sian Jones, an economist at IHS Markit, which compiles the survey.

Output prices declined for the second month in a row as competition in the sector weighed.

The rate of job creation declined in February to its slowest in the current six-month-long trend of expansion.

Looking forward, service providers reported a greater degree of optimism for the next year, which was commonly attributed to a larger client base, marketing activity and investment in new service lines.

A parallel survey on Monday showed activity in the manufacturing sector shrank in February for the 10th straight month, but at its narrowest rate in six months thanks to a smaller drop in new orders.

“Although new export orders rose at the fastest pace since last October, total sales showed the weakest growth in five months. Meantime, new business rose supported by a faster expansion in export. At the same time employment increased at only a fractional prate, as backlogs of work contracted further. On the price front, cost burdens increased further, as greater competition weighed on pricing decisions while output charges declined for the second straight month. Finally, business confidence remained well below the long-run series average,” IHS Markit said.

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