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Updated December 29th, 2023 at 12:44 IST

Russia's service sector sees December growth at highest rate since August

S&P Global attributed the acceleration in business activity to a notable uptick in new sales, driven by robust demand from both domestic and foreign clients.

Business Desk
Russian service sector growth
Russian service sector growth | Image:Pexels
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Russia's December services sector experienced its fastest growth since August, according to the S&P Global Purchasing Managers' Index (PMI). The PMI for Russian services increased to 56.2, up from November's 52.2, marking the 11th consecutive month of expansion, as activity surpassed the 50-point threshold that distinguishes growth from contraction.

S&P Global attributed the acceleration in business activity to a notable uptick in new sales, driven by robust demand from both domestic and foreign clients. 

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While Russia's manufacturing sector has primarily relied on domestic demand since the departure of Western capital following the February 2022 invasion of Ukraine, the services sector has seen an expansion in export orders since April.

The persistent challenge faced by companies across various industries is the shortage of labour, largely stemming from conscription and emigration related to Russia's "special military operation" in Ukraine. Despite these challenges, firms were able to increase their workforce numbers on average, a move aimed at alleviating capacity constraints.

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S&P Global reported that backlogs of work continued to accumulate due to the sharper rise in new orders, marking the fifth consecutive month of growth at a solid pace, consistent with November's levels. 

Although surveyed firms maintained optimistic expectations for future output, confidence levels dipped to a four-month low in December, signalling potential concerns about the ongoing labour shortages and geopolitical uncertainties.

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(With Reuters Inputs)

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Published December 29th, 2023 at 12:04 IST

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