Business Russia’s services sector returns to growth in July

Business Russia’s services sector returns to growth in July

Business

MOSCOW, Aug 5 (Reuters) – Russia’s service sector returned to growth in July after four months of contraction, showing the fastest rise in business activity since mid-2008 as coronavirus lockdown measures were relaxed further, a business survey showed on Wednesday.

The Markit Purchasing Managers’ Index (PMI) for services companies rose to 58.5 from 47.8 in June, crossing the 50 mark that separates expansion from contraction.

Both business activity and client demand saw a “substantial uptick” last month, said Sian Jones, an economist at survey compiler IHS Markit.

Optimism reached a nine-month high in July, with firms citing efforts to attract new clients and hopes for a recovery in global demand.

With export orders contracting while domestic demand rose, “historically weak overall demand led to further job losses, as firms sought to reduce their monthly outgoings amid COVID-19 related uncertainty,” Jones said.

A parallel survey on Monday showed manufacturing sector activity shrank faster in July as the coronavirus crisis and poor demand weighed.

Reporting by Andrey Ostroukh; editing by John Stonestreet

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