Russian services sector sees fastest growth since January, PMI shows

MOSCOW, Dec 30 (Reuters) - Russia's ⁠services sector ⁠expanded ‍in December at its quickest pace since January, driven by a robust increase in new orders, ‍the latest PMI survey from S&P Global showed on ​Tuesday.

The S&P Global Russia Services PMI Business Activity Index edged up ​to 52.3 in December from 52.2 in November. Readings above 50 denote growing activity, while below 50 indicates contraction.

The slight rise in December ​was attributed to stronger customer demand and a solid increase in new business, which grew at its fastest ​rate since May.

Despite this growth, service providers reduced staffing levels for the first time ‌in six months, and at the fastest rate in nearly three years. The reduction was primarily ​due to a decrease in full-time ⁠workers, as business confidence waned.

Pressure on capacity was evident, with backlogs of work accumulating at ‌the fastest pace in a year, while firms reported higher new order inflows.

Operating expenses rose at the slowest rate since May ‌2009, with firms noting higher transportation and supplier costs but reduced wage ‌bills. Firms sought to pass on their higher costs by raising their selling prices, albeit at a slower pace than in previous months.

Business ‍confidence dipped, with optimism at its second-lowest level since January 2023, although firms remained hopeful ⁠for stronger demand conditions and new service lines.

The composite PMI, which includes manufacturing, stagnated at 50.0, as a decline in manufacturing offset the growth in service sector business.

(Reporting by Gleb Bryanski; Editing by Hugh Lawson)

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