September 4, 2019 / 6:03 AM / a month ago

Russian services activity picks up in Aug but optimism fades -PMI

MOSCOW, Sept 4 (Reuters) - Activity in Russia’s service sector increased in August, as companies reported a faster increase in new orders even though business confidence slipped to a five-month low, a survey showed on Wednesday.

Markit’s Purchasing Managers’ Index (PMI) rose to 52.1 in August from 50.4 a month before, pulling away from the 50 mark that separates expansion from contraction.

The headline PMI reading also received support from a rebound in external demand, the monthly survey showed.

“Nevertheless, firms expressed further reluctance to increase employment and a lower degree of optimism towards future output. Many stated that confidence was dented by concerns about the wider economy,” said Sian Jones, an economist at IHS Markit, which compiles the survey.

The Russian economy is on track to grow by 1.3% this year, the economy ministry forecasts, after expanding by 2.3% last year as consumer demand is waning, while the economy lacks support from investment activity.

The survey showed the services sector shed jobs for the fourth straight month in August even though companies continued to be broadly optimistic regarding business activity over the next year.

But the degree of optimism fell to a five-month low and was subdued compared with the long-run trend.

A sister survey showed this week that activity in the Russian manufacturing sector deteriorated in August for the fourth month in a row, hit by the fastest contraction in new orders in more than four years.

- Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence.

To subscribe to the full data, click on the link below: here

For further information, please phone IHS Markit on +800 6275 4800 or email economics@ihsmarkit.com (Reporting by Andrey Ostroukh; Editing by Catherine Evans)

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