Russian Services Activity Expands Most Since August 2020 On Strong Demand

(RTTNews) - Russia's service sector expanded at the fastest pace in just over two-and-a-half years in March amid stronger demand conditions and a further upturn in new orders, survey results from S&P Global showed on Wednesday.

The Services Purchasing Managers' Index, or PMI, rose sharply to 58.1 in March from 53.1 in the previous month. A score above 50 suggests expansion in the sector.

Increased customer referrals, client activity, and effective advertising efforts contributed for the new business growth in March, which was the steepest since August 2020.

New export orders grew for the first time in thirteen months. The rise in foreign client demand was attributed to increased customer interest in a broader range of export markets.

On the price front, input prices rose markedly in March, led by hikes in supplier prices, greater wage bills and higher utility costs. Nonetheless, the rate of price growth eased to the slowest since January 2021.

The rate of charge inflation softened to the weakest in over two years as some companies highlighted discounts in a bid to remain competitive.

Russian service providers raised their workforce numbers for the second straight month, in line with a stronger upturn in new business. Moreover, the rate of job creation was the quickest since June 2021.

Firms maintained a positive outlook for output over the year ahead in March, boosted by plans for expansion of current facilities and new product lines, alongside hopes of greater client demand.

The composite output index posted 56.8 in March, up from 53.1 in February, reflecting a steep upturn in private sector business activity. The rise in output was the fastest since August 2020 and historically elevated.