Russian Services Sector Growth

(Reuters) – Activity across Russia's services sector expanded for a fifth consecutive month in November, reaching its fastest pace since January, fueled by an increase in new orders.

The S&P Global Purchasing Managers' Index (PMI) for Russian services climbed to 53.2 in November from 51.6 in October, remaining well above the 50 mark that indicates expansion versus contraction.

New export business rebounded in November, and employment in the sector increased for the 16th straight month.

Despite these gains, Russia continues to grapple with persistent inflation and a significant depreciation of the rouble in recent weeks. Firms reported a notable rise in cost burdens, with S&P Global attributing the increase in input prices to higher supplier, transportation, and wage costs, as well as unfavorable exchange rate impacts on purchase prices.

Companies are experiencing renewed capacity pressure, with backlogs of work rising for the first time in eight months, albeit slightly.

Business confidence among Russian service providers improved, as firms expressed optimism regarding future output.

A separate survey released on Monday indicated a slight uptick in activity within Russia's manufacturing sector in November, driven by growth in output and new orders, even as firms reduced staff numbers.