Despite a rise in new business, the growth of activity in Russia’s service sector was at a four-month low in December, according to the latest report on the Markit purchasing managers index (PMI).
The index’s headline figure is still above the 50 mark that separates growth in activity from contraction but declined to 53.1 from 55.6 in November.
“Business activity growth lost momentum at the end of 2019. Greater competition reportedly weighed on the upturn, with firms reining in their hiring activity in turn,” said Sian Jones, an economist at business information provider IHS Markit.
“The latest figure signaled a solid, albeit slower rise in business activity. Firms stated that the upturn was linked to greater client demand, although some mentioned that greater competition had led some customers to delay orders. Nonetheless, strong expansions in October and November helped support the best quarterly performance since the opening three months of 2019,” he said.
Still, service sector companies registered a fourth consecutive monthly rise in employment, linking the job creation to higher business requirements, the monthly survey showed.
“More intense competition also resulted in service providers struggling to pass on higher costs to clients, with selling prices rising at one of the slowest paces for over a year,” Jones said.
Output expectations remained muted, but firms predicted an increase in business activity over the next year, in line with their peers from the manufacturing business.