Russia’s Services Sector Growth in August

(Reuters) – Activity in Russia’s services sector grew at its fastest pace in seven months in August, according to a business survey released on Wednesday. This growth was primarily driven by a sharp increase in new export business.

The S&P Global Purchasing Managers’ Index (PMI) for Russian services rose to 52.3 in August, up from 51.1 in July, moving further above the 50 mark that indicates expansion rather than contraction.

Since the departure of Western capital and companies post the February 2022 invasion of Ukraine, the manufacturing sector has been reliant on domestic demand. However, the services sector has shown resilience in export orders.

S&P Global noted that the August expansion was the second largest since the onset of the war. Increased demand from new and existing clients in key export markets contributed significantly to this upturn.

The report also highlighted that service providers recorded job creation for the 13th consecutive month as new orders continued to rise. Firms expressed confidence in their ability to increase output over the next year, bolstered by increased spending on advertising and training efforts aimed at enhancing business activity.

In contrast, a related survey published on Monday indicated that activity in Russia’s manufacturing sector grew at its slowest pace in over a year in August, with declines in output, new orders, and employment.