Markit says Russia's Services PMI falls to 48.0 in December

MOSCOW, Dec 31 (PRIME) -- Russia's Services Purchasing Managers' Index (PMI) fell to 48.0 in December from 48.2 in November, below the 50 no-change mark, which signals an overall decline, researcher Markit said on Thursday.

“December PMI data signalled a further downturn in business activity across the Russian service sector. The pace of contraction remained only moderate, as the decline in new business eased. At the same time, the rate of input price inflation was the second-fastest since March and marked overall,” the statement said.

“Despite weak client demand, firms partly passed on higher costs through the quickest rise in charges since April 2019. Meanwhile, output expectations improved to a four-month high amid hopes of an end to the pandemic.”

The Composite PMI increased to 48.3 in December from 47.8 in November.

Russian service providers registered a substantial rise in cost burdens again during December. Although the rate of input price inflation softened from that seen in the previous survey period, it was still the second-fastest since March, Markit said.

The marked rise in cost burdens was often linked to supplier price hikes and unfavorable exchange rate movements. At the same time, selling prices rose at an accelerated pace despite customer demand falling further. The solid increase was commonly attributed to the partial pass-through of greater costs to clients. Moreover, the pace of charge inflation was the quickest since April 2019.

"Russian service providers signaled a further fall in output in December, as weak client demand persisted at the end of 2020. Although the contraction in new business eased, new export sales dwindled once again," Sian Jones, economist at IHS Markit, said, as cited in the statement.

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