31 Dec 2019 12:46

Russia Services PMI drops to 53.1 in Dec from 55.6 in Nov - IHS Markit

MOSCOW. Dec 31 (Interfax) - The Russia Services PMI dropped to 53.1 points in December from 55.6 points in November, IHS Markit said in a report on survey data.

The Russia Composite Output Index, which tracks activity in both the services and manufacturing sectors, fell to 51.8 points in December from 52.9 points in November.

Index readings above 50.0 points indicate growth in business activity, while those of less than 50.0 show a decline.

"The latest figure signaled a solid, albeit slower rise in business activity. Firms stated that the upturn was linked to greater client demand, although some mentioned that greater competition had led some customers to delay orders," the report said.

"The rate of new business growth picked up in December, with the expansion the second-fastest since March. The strong upturn was broadly in line with the series average and commonly linked to the acquisition of new clients. Meanwhile, service providers recorded a renewed rise in new business from abroad," it said.

"On the price front, cost burdens faced by service providers increased at the sharpest rate for four months. Input price inflation was largely linked to higher supplier and wage costs," the report said.

"Despite a faster rise in costs and reports of stronger underlying demand, companies reported challenges in raising their selling prices due to more intense competition for customers. Subsequently, the rate of charge inflation softened to a moderate pace that was the second-slowest since September 2018," it said.

"Meanwhile, business activity expectations among service sector firms remained historically muted in December. Although companies still expect output to rise over the coming 12 months, the degree of confidence fell to the lowest for over two years," the report said.

"Finally, employment increased for the fourth month running in December, albeit at the slowest pace since September. Job creation was attributed to greater business requirements. Service providers continued to register a reduction in pressure on capacity as backlogs of work fell at a solid and accelerated pace," it said.