Russia's Service Sector Growth Gathers Pace In June

(RTTNews) - The Russian service sector grew at its fastest pace in three months in June., underpinned by stronger demand conditions and greater customer interest, survey results from S&P Global showed on Wednesday.

The Services Purchasing Managers' Index, or PMI, climbed to 56.8 in June from 54.3 in the previous month. A reading above 50 indicates expansion in the sector.

New orders increased for the fifth straight month in June on the back of favorable demand conditions. New foreign orders also grew at the shaprpest rate in over four years after falling slightly in May.

Consequently, service providers raised their workforce numbers at the strongest pace since May 2011.

On the price front, input price inflation quickened further in June, linked to the rise in business expenses due to higher supplier prices and increases in wage bills. Selling prices also rose substantially, at the steepest rate in nine months.

Companies showed stronger expectations regarding the outlook over the next year, which partly reflected hopes that greater client referrals would translate into higher customer numbers.

The composite output index also rose to 55.8 in June from 54.4 in May, indicating a strong upturn in private sector business activity. Stronger growth was more evident in service output as the rise in manufacturing production eased.