By Andrey Ostroukh
MOSCOW-Russia's services sector returned to expansion in July as
new businesses grew at the fastest pace in 20 months, a Markit
survey of purchasing managers showed Wednesday.
The headline Purchasing Managers' Index for the services sector
rose to 51.6 in July from 49.5 in June, returning above the 50
mark, which separates growth from contraction.
"Amid reports of a gradually improving business climate, which
led to the best increase in new work for 20 months, the Russian
service sector helped to drive some marginal growth of the economy
at the start of the third quarter of 2015," Paul Smith, senior
economist at Markit, said in the PMI report.
Prices rose across the services sector in line with the trend
seen over the past five-and-a-half years. But competitive pressure
sent the rate of inflation to its lowest level in 11 months.
Business expectations improved in July due to hopes for stronger
demand, the Markit survey showed.
Employment in the services sector, however, declined again as
companies reported excess capacities. New businesses grew for the
fourth month in a row.
However, a similar survey earlier this week of the manufacturing
sector showed output fell further in July due to poor demand that
put pressure on production and new orders, fitting Russia's broader
economic contraction pattern.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com