Moscow: Russia’s services sector experienced a notable acceleration in activity in November, signaling a tentative recovery amid ongoing economic uncertainty. The latest S&P Global Russia Services PMI survey showed the business activity index rising to 52.2, up from 51.7 in October. This marks the fastest expansion in six months, highlighting renewed momentum in a sector that has struggled with subdued demand for much of the year.
Analysts attribute the rebound primarily to an uptick in new orders, ending a four-month trend of declining business inflows. Companies across retail, hospitality, IT, and professional services reported increased client engagement, which helped drive overall activity higher. The survey also indicated a rise in backlogs of work, with unfinished orders growing at the sharpest pace since June, suggesting that firms are contending with higher demand even as capacity constraints remain.
While employment showed positive movement, the rate of hiring remained moderate, reflecting cautious optimism among businesses. Firms added staff to meet growing workloads, but the increase was slower than in previous months, highlighting ongoing uncertainty in the labor market.
In terms of pricing, the report noted a softening in input costs and output charges. Although inflationary pressures persist, firms reported a less pronounced rise in expenses compared with previous months, providing some relief to service providers and their customers. Business sentiment also improved slightly, with companies expressing measured confidence in the outlook and signaling plans to launch new initiatives and expand service offerings.
Despite the promising performance in services, Russia’s broader economy remains mixed. The Composite PMI, which includes both manufacturing and services sectors, stood at 50.1, barely above the threshold separating growth from contraction. The ongoing weakness in manufacturing continues to temper overall economic performance, indicating that structural challenges remain.
Economists suggest that the November data represents a cautious but positive sign for Russia’s services industry. If the rebound sustains, it could improve revenue flows and support employment in key service-oriented sectors. However, modest hiring growth, capacity limitations, and macroeconomic uncertainties indicate that the recovery is still fragile. Investors and policymakers will be closely monitoring the coming months to see whether the growth trend can gain broader traction across the economy.