Russia’s services sector contracted sharply in September, posting its steepest decline since December 2022. The drop came as new orders fell, weighing heavily on business activity, a survey showed on Friday.
The S&P Global Russia Services PMI fell to 47.0 in September, down from 50.0 in August. A reading above 50 signals growth, while below 50 points to contraction.
The decline was driven by the sharpest drop in new orders since December 2022. Firms reported fewer customers and weaker purchasing power. Despite this, employment rose at the fastest pace since January 2024, as companies worked through backlogs and prepared for possible future demand.
Input costs increased at the quickest pace in five months, fueled by rising supplier, wage, and utility expenses. Businesses limited price hikes for customers to stay competitive, even as margins came under pressure.
The survey noted that business confidence improved slightly, with firms hoping for more economic stability and stronger customer demand ahead.
The composite PMI, which combines services and manufacturing, fell to 46.6 in September from 49.1 in August. This marked the sharpest drop in private sector output since October 2022.
The results highlight ongoing challenges in the Russian economy. Both manufacturing and services continue to face weaker demand and rising costs, keeping pressure on growth.
