Russia’s services sector shrank for the fourth straight month in June but at the slowest pace since the new coronavirus crisis hit, as the gradual reopening of the economy saw some firms report higher demand, a business survey showed on Friday, Reuters informed.
The Markit Purchasing Managers’ Index (PMI) for services stood at 47.8 in June, below the 50 mark that separates expansion from contraction but far higher than May’s reading of 35.9 and the record low of 12.2 hit in April.
“Russian service providers signalled a notably slower decline in business activity in June as parts of the sector began to reopen, with the rate of contraction easing further from April’s nadir,” said Sian Jones, an economist at survey compiler IHS Markit. “That said, demand was historically subdued and the downturn in new orders remained sharp.”
Weak demand led to a continued decline in employment, but confidence returned to businesses following three months of pessimism.
“The damage done in the second quarter looks set to weigh on economic growth as our latest forecast for 2020 indicates an expected 8.6% decline in GDP,” Jones added.
A parallel survey on Wednesday showed activity in the manufacturing sector remained in contraction in June but shrank at the slowest rate for 13 months.