Street Calls of the Week
Investing.com -- Russian service sector business activity contracted in September, marking the third decline in four months and the steepest drop since December 2022, according to S&P Global’s latest PMI survey on Friday.
The S&P Global Russia Services PMI Business Activity Index fell to 47.0 in September, down from the 50.0 reading in August, indicating a renewed contraction as the third quarter ended. Any reading below 50 signals a decline in activity.
The decline was driven by reduced client demand, with new orders decreasing for the third consecutive month. The pace of contraction in new business accelerated to the fastest since December 2022, with companies citing lower customer numbers and reduced purchasing power among clients.
Despite the downturn in sales, Russian service providers continued hiring, with employment rising at the strongest pace since January 2024.
Companies reported adding staff to help clear backlogs of work, which decreased for the first time in 11 months.
On the cost side, Russian service providers faced higher supplier, wage, and utility expenses, pushing input prices up at the sharpest rate in five months.
However, companies raised their selling prices at a slower pace, balancing the need to pass on higher costs with competitive pressures and efforts to stimulate sales.
The broader S&P Global Russia Composite PMI Output Index, which includes both manufacturing and services, fell to 46.6 in September from 49.1 in August, signaling the quickest decline in private sector activity in almost three years. Manufacturing production also saw a steeper decline alongside the service sector contraction.
Despite these challenges, business confidence among Russian service providers improved in September, with companies expressing optimism about future economic stability and potential increases in customer numbers.
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