(Reuters) -Russia’s services sector contracted at its fastest pace since June 2024 in July, a business survey showed on Tuesday, as new orders declined in a subdued sales environment.
The S&P Global Purchasing Managers’ Index (PMI) for Russia’s services sector fell to 48.6 last month from 49.2 in June, moving further below the 50 mark that separates expansion and contraction.
“Lower activity was widely linked to a reduction in new order intakes and weak client demand,” S&P Global said.
Despite the overall contraction, new export business, which had contracted for a year after Moscow invaded Ukraine in February 2022, expanded for the ninth consecutive month in July, albeit at a slower pace than in June.
On the employment front, Russian services firms increased staffing levels at the start of the third quarter, driven by expectations of future growth in new sales.
“Panellists stated that optimism stemmed from hopes of an improvement in demand and financial conditions, as well as refocused company strategies,” S&P Global said.
A sister survey last week showed that activity across Russia’s manufacturing sector declined at its fastest pace since March 2022 in July, with business confidence slipping to an almost three-year low.
(Reporting by Alexander Marrow; Editing by Hugh Lawson)
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