MOSCOW (Reuters) – Conditions in Russia’s services industry declined for the second month running in November, a business survey published Monday showed, as companies continue to face pressure from Western sanctions, weak consumer demand at home and logistics challenges.
The S&P Global Purchasing Managers’ Index (PMI) for Russian services climbed to 48.3 after hitting an eight-month low of 43.7 a month earlier – but remained below the crucial 50 mark that separates expansion from contraction.
In a significant turnaround from a month earlier – when the impact of President Vladimir Putin’s order to call up more than 300,000 reservists to fight in Ukraine was weighing on the economy – firms reported only a “marginal decline in new business” during November, S&P Global said.
The mobilisation order saw demand fall across the economy, as hundreds of thousands of men joined the army or fled Russia and a fresh wave of economic uncertainty hit the country.
The latest PMI surveys – closely watched indicators of economy performance – show signs that Russian firms are tentatively recovering from the initial economic blow.
A sister survey published last week showed Russia’s manufacturing industry expanded at its fastest pace in almost six years during November.
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But Russian service companies are far from out of the woods just yet, as they face a host of challenges due to sanctions and the ongoing impact from what Russia calls a “special military operation” in Ukraine.
Export orders fell faster in November than a month earlier, S&P Global said, while domestic demand remained weak, with employment levels falling and prices for supplies and logistics on the rise.
(Reporting by Jake Cordell; Editing by Toby Chopra)