Russia Services Sector Contracts the Most in 9 Months

The S&P Global Russia Services PMI declined to 48.2 in June 2026 from May's 48.7, marking the fourth consecutive month of contraction in the sector. The latest reading also marked the steepest contraction since last September, driven by sharper declines in both output and new orders. In line with lower new orders, firms reduced employment for the fifth consecutive month, with the pace of job shedding the steepest in three and a half years. On the price front, input costs rose due to higher transportation fees and wage bills. However, input price inflation eased for the fifth consecutive month, down from January's VAT-driven peak. Meanwhile, output charges also increased as firms passed higher costs on to customers, although output price inflation slowed to its lowest level since January 2021. Looking ahead, business sentiment remained weak, reaching its second-lowest level since December 2022.

The S&P Global Russia Services PMI declined to 48.7 in May 2026 from 49.7 in the previous month, marking the third consecutive month of contraction in the sector. The latest reading also marked the steepest contraction since last September, driven by declines in output and a sharper fall in new sales. In line with lower new orders, firms reduced employment, with the pace of job shedding easing to its slowest level in three months. On the price front, input costs rose due to higher supplier prices, energy costs, and wage bills. However, input price inflation eased to its lowest level since last December. Meanwhile, output charges also increased as firms passed higher costs on to customers, although output price inflation slowed from January's recent VAT-driven peak and was the weakest so far in 2026. Finally, business sentiment weakened to its lowest level since the end of 2022 amid subdued demand.

The S&P Global Russia Services PMI climbed to 49.7 in April 2026 from 49.5 in the previous month, marking the second consecutive month of contraction in the sector. The contraction was driven by declines in output and attributed to weak client demand and a reduction in new orders for the first time in six months, though only fractionally, amid financial difficulties among customers. In line with lower new orders, firms reduced employment, with job shedding easing compared with March and remaining modest overall. On the price front, input costs rose due to higher supplier prices and ongoing adjustments to the recent VAT hike. However, price inflation eased further from January’s recent high and was softer than the series trend. Meanwhile, output costs rose as firms passed through higher costs to customers, despite inflation slowing. Finally, business sentiment weakened to its lowest level in 40 months amid challenging financial conditions.