MOSCOW (Reuters) – Growth in Russia's services sector fell to a three-month low in December as demand fell and cost pressures increased, Standard & Poor's Global said on Saturday.
The Standard & Poor's index of business activity for Russia's services sector fell to 51.2 in December from 53.2 in November, the sixth straight month of expansion but at a slower pace. A reading above 50 indicates growth, while a reading below 50 indicates contraction.
Despite the continued rise in new orders, the pace of production growth has slowed, with participants attributing the slowdown to relatively weak customer demand.
New business continued to grow, albeit at a slower rate than in November, supported by stronger customer demand and new customer acquisition.
Employment growth accelerated, with workforce numbers rising at the fastest pace in four months to address a growing backlog. The backlog was the steepest in 16 months, as companies struggled to manage a steady influx of new business.
Cost inflation accelerated, driven by unfavorable exchange rate movements and higher supplier prices, recording the largest rise since January. However, the increase in selling prices slowed to their weakest levels since last August, as companies tried to pass on higher costs to customers.
Business confidence fell to its lowest levels since July 2023, with businesses remaining optimistic about future activity but concerned about rising cost burdens.
The broader private sector also saw a slowdown, with the composite PMI output index falling to 51.1 in December from 52.6 in November, reflecting weak growth in both manufacturing and services industries.
