Russian Service Sector Remains In Contraction

(RTTNews) - Russia's service sector activity deteriorated for the second straight month in April amid a renewed fall in new business, survey results from S&P Global showed on Wednesday.

The services purchasing managers' index, or PMI, rose to 49.7 in April from 49.5 in March. Nonetheless, any score below 50 suggests contraction in the sector.

The sustained contraction in April was attributed to weak client demand and a reduction in new orders for the first time in six months due to financial difficulties faced by customers.

In line with lower new orders, companies reduced workforce numbers, though the rate of job shedding eased since March.

On the price front, input price inflation remained strong but eased further from January's recent high. The overall operating expenses were pushed up by greater supplier prices and ongoing adjustments to the recent VAT hike. Selling prices also increased at a softer pace in April.

Looking ahead, output expectations weakened as challenging financial conditions dampened positive sentiment.

The composite output index rose to 49.1 in April from 48.8 in March, signaling a marginal and slower contraction in the Russian private sector activity.