Services Sector in Slight November Decline: PMI

Russia’s services sector declined slightly in November from a one-year high reached a month earlier but remained strong overall this year, supported by a rise in new orders, IHS Markit‘s purchasing managers index (PMI) showed on Wednesday.

The indicator fell to 55.6 in November, from 55.8 in October, but remained well above the 50 mark that separates expansion from contraction.

“Stronger domestic demand conditions drove another monthly increase in workforce numbers midway through the fourth quarter, as backlogs declined at the slowest pace since April 2018,” said Sian Jones, an economist at IHS Markit, which compiles the survey.

The solid rise in new business allowed service sector firms to expand their workforce numbers and reduce their backlog of work, IHS Markit said.

Companies, however, expressed a lower degree of confidence in November, citing economic uncertainty that weighed on optimism.

“Expectations dropped to the lowest since August 2018 amid concerns surrounding the consistency of future new order inflows,” Jones said.

“Input costs faced by service providers rose at a softer pace in November. The rate of increase was the slowest since January 2018, with some panelists reporting discounting at suppliers,” he added.

The outlook from Russia’s services was more positive than that of their peers in the manufacturing business. A sister survey on Monday showed activity in the manufacturing sector shrank in November for the seventh straight month and reached a decade-low level, hit by weaker client demand.