Russia’s service sector activity contracted more-than-expected in December amid a slight decrease in new business, survey figures from Markit Economics showed Thursday.
The seasonally adjusted services Purchasing Managers’ Index, or PMI, fell to 47.8 in December from 49.8 in November. Economists had expected the index to drop to 48.2.
Any reading below 50 indicates contraction in the sector. Moreover, a fall in output was reported for the third successive month
The composite index also slipped to a downturn trend in December, with the index falling to 47.8 from 50.5 in the preceding month.
New business received by the service providers declined further in December, though only marginal. Manufacturing new orders dropped for the first time in four months.
Employment level the service sector continued to fall in December, reflecting squeezed cash availability at service providers. Similarly, staffing levels at manufacturers also fell during the month.
On the price front, input price inflation faced by the service sector remained sharp in December, driven by higher raw material costs. Output prices rose slightly over the month, extending the current sequence of inflation to just over six years.
“However, the weak performance by the service sector has not dampened firms optimism towards future business activity, and although the level of positive sentiment is only slight, panelists still anticipate an increase in output over 2016,” Samuel Agass, Economist at Markit, said.
The material has been provided by InstaForex Company – www.instaforex.com