Russia’s service sector returns to growth in September – PMI

By on October 5, 2022 0
  • This content was produced in Russia where the law limits coverage of Russian military operations in Ukraine

MOSCOW, Oct 5 (Reuters) – Russia’s services sector returned to growth in September, a business survey showed on Wednesday, buoyed by an increase in domestic demand but sanctions on Moscow continue to restrict orders abroad. ‘foreign.

The S&P Global Purchasing Managers’ Index (PMI) for Russian services rose to 51.1 in September, back above the 50 mark that separates contraction from expansion, after slipping below that level in August at 49.9.

“Demand from overseas customers has declined at a steady pace which accelerated especially from August,” S&P Global said in a statement. “The decline has often been attributed to the impact of sanctions on business operations.”

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New export orders fell further from August levels and, although new business rose, it did so at the slowest pace of the current four-month expansion streak.

Employment also fell, at its fastest pace since May.

It was unclear to what extent President Vladimir Putin’s partial mobilization order, issued on September 21, had weighed on the workforce. Tens of thousands of men have been drafted into the army or fled overseas since then.

Concerns about economic and political uncertainty weighed on sentiment, S&P said, although business confidence rose on hopes of stronger customer demand.

A sister survey earlier this week showed Russian factory activity grew at its fastest pace in 3.5 years in September, although Western sanctions continued to weigh on export activity.

The manufacturing sector has recorded six months of contraction that began in February, when Russia sent tens of thousands of troops to Ukraine, triggering unprecedented Western sanctions against Moscow.

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Reporting by Alexander Marrow; Editing by Susan Fenton

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