Markit says Russia’s Services PMI falls to 55.6 in November

MOSCOW, Dec 4 (PRIME) -- Russia’s Services purchasing managers’ index (PMI) fell to 55.6 in November from 55.8 in October, staying above the 50 no-change mark, supported by a solid rise in new orders but suffering from a decline in foreign client demand for the first time since July, researcher IHS Markit said in a statement on Wednesday.

The Composite PMI decreased to 52.9 in November from 53.3 in October.

Stronger domestic demand prompted another monthly increase in workforce numbers, and backlogs declined at the slowest pace since April 2018, the researcher said, adding, “Business confidence remained muted, with the level of optimism falling to the lowest since August 2018.”

The input costs of servicing companies increased at a historically-low pace due to discounts provided by suppliers, Markit said.

Regarding the Composite PMI, Markit said that Russian private companies showed a fifth consecutive month of expansion in November in spite of a further contraction in the manufacturing sector as the upturn in the services sector outweighed it.

“Meanwhile, both manufacturers and service providers noted softer inflationary pressures, with rates of increase in input prices and output charges easing to historically muted paces. Selling prices rose only modestly amid efforts to remain competitive,” Markit said, adding that private companies also managed to raise their workforce numbers for a third month in a row.

“Companies expressed a lower degree of confidence in November, as economic uncertainty weighed on optimism. Expectations dropped to the lowest since August 2018 amid concerns surrounding the consistency of future new order inflows,” Markit said quoting Economist Sian Jones.

“At the composite level, inflationary pressures softened further in November, suggesting that the Central Bank of Russia may look to reduce the key rate again in due course amid muted price increases and historically modest client demand across the private sector.”

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