Russia's services sector expanded at a faster pace in May, driven by stronger demand and new business inflows, according to S&P Global's latest PMI survey. The Services Business Activity Index rose to 52.2 from 50.1 in April, signalling the sharpest output growth since January. New orders increased at the quickest rate in four months, as firms cited improved market conditions and new customer acquisitions. However, the upbeat performance was tempered by weakening business confidence, which fell to its lowest since July 2023, amid concerns over global demand. Despite the uptick in demand, backlogs of work remained broadly unchanged, and staffing levels declined, with firms citing sufficient capacity and a lack of replacements for voluntary leavers. Input costs rose at the slowest pace since July 2020, but service providers increased their selling prices at the fastest rate in four months, driven by demand and cost pass-throughs. The Russia Composite PMI Output Index rose to 51.4 in May, up from 49.8 in April, reflecting a renewed expansion in private sector activity. Services growth offset a decline in manufacturing output, while overall employment dipped and inflationary pressures remained historically subdued. Attribution: Amwal Al Ghad English Subediting: M. S. Salama
