December 31, 2019, 09:42 / Economics

The Russian service sector PMI index dropped to 53.1 points

index The Russian service sector PMI fell to 53.1 points in December from 55.6 points in November, according to data . IHS Markit

In addition, the aggregate output index, which tracks activity in both Russia's manufacturing and service sectors, fell to 51.8 points in the reporting period. In November, this figure was 52.9 points.

survey The results of the December PMI indicate a steady growth in business activity in the Russian services sector. “However, the pace of expansion slowed to a four-month low despite strong growth in new orders,” the study said. Domestic and external demand strengthened as companies "indicated a rebound in export orders." Despite this, business expectations fell to their lowest level since August 2017 amid increased competition and job growth slowed. Selling prices rose at a slower pace in December as companies were unable to absorb significant cost increases amid competition for customers.

The costs faced by service companies have been growing at their fastest rate for the past four months. “Input price inflation was mainly due to price increases by suppliers and high labor costs,” the study noted. Business expectations for growth in services activity remained "historically muted" in December. Experts say output is expected to rise next year, even as optimism has fallen to its lowest level in more than two years.