Russian services sector sees fastest growth in a year, PMI shows

(Reuters) - Russia's services sector saw its fastest growth in a year in January, buoyed by a sharp increase in new business, a survey showed on Wednesday.

The S&P Global Purchasing Managers' Index for Russian services rose to 54.6 in January from 51.2 in December, indicating a strong expansion in output. A reading above 50 signals growth in activity, while below 50 indicates contraction.

New business at Russian services firms increased for a seventh consecutive month, with the pace of growth the quickest in 12 months. The survey attributed this to improved demand conditions and a diversification of service lines.

However, inflationary pressures intensified. Input prices rose at the fastest rate in a year, driven by higher supplier and transportation costs, as well as increased wage bills. In response, firms raised their output prices at the joint-quickest pace since July 2024.

Employment in the services sector continued to rise, although the pace of job creation eased from December.

Meanwhile, backlogs of work accumulated for the third month in a row, as new order inflows placed pressure on capacity. The level of incomplete business rose at the second-fastest rate since August 2023.

Business confidence improved, with optimism about future output at its highest level since September 2024.

(Reporting by Reuters; Editing by Christina Fincher)

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