Russian services sector contracts in April as sanctions weigh - PMI
Reuters
Published May 06, 2022 02:03AM ET
(Reuters) - Russia's service sector activity shrank in April for the second month in a row, hurt by weak client demand and a drop in new orders as sanctions dented customer purchasing power, a business survey showed on Friday.
The S&P Global (NYSE:SPGI) Purchasing Managers' Index (PMI) rose to 44.5 in April from 38.1 the previous month, which was its lowest since May 2020, but stayed below the 50 mark that separates expansion from contraction.
Companies reported a fall in employment for the fifth month running as they tried to cut costs and also expressed further pessimism about the outlook for the year ahead.
"Anecdotal evidence suggested that negative sentiment stemmed from the introduction of sanctions and weaker client demand. Although less downbeat than March, the degree of confidence was negative for only the second time since May 2020," the PMI report said.
Russian services providers reported a seventh successive monthly decline in new orders, while new export orders also fell.
Cost burdens continued to rise markedly in April, and Russian service providers reported an increase in output charges, which rose at the second-fastest rate since data collection started in October 2001.
A sister survey showed earlier this week that activity in Russian manufacturing shrank for the third month running in April, driven by output and employment declines, though at a slower pace than in the previous month.
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Written By: Reuters
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