Key facts
- Russia's services sector contracted in June, with the S&P Global Russia Services PMI Business Activity Index falling to 48.2.
- Output declined at the fastest pace since September 2025, driven by subdued customer demand and a drop in new orders.
- New business contracted at the fastest rate since December 2022, linked to reduced customer purchasing power.
- Employment saw its steepest decline in three-and-a-half years as companies cut costs.
- Input cost inflation eased for the fifth consecutive month, and selling price inflation slowed to its weakest since January 2021.
- Business confidence remained near a three-and-a-half-year low.
Russia's services sector experienced a deepening downturn in June, as indicated by the S&P Global Russia Services PMI Business Activity Index, which fell to 48.2 from 48.7 in May. A reading above 50 signifies growth, while below 50 indicates contraction.
Output within the services sector declined for the fourth consecutive month, reaching its fastest rate of decrease since September 2025. This contraction was attributed by firms to subdued customer demand and a sustained drop in new orders. New business has now decreased for three months in a row, with the rate of contraction accelerating to its highest since December 2022. Companies linked these sales declines to reduced purchasing power among clients and their financial difficulties.
Employment in the sector also fell for the fifth consecutive month, marking the steepest pace of job shedding in three-and-a-half years, as companies focused on cost-cutting measures and did not replace voluntary leavers. Backlogs of work continued to decline at the second-fastest rate observed since December 2022.
Price pressures showed signs of easing. Input cost inflation slowed for the fifth month in a row, reaching its weakest point this year. Similarly, selling price inflation softened to its slowest pace since January 2021, with some firms resorting to discounts to stimulate sales.
Despite these challenges, businesses maintained a degree of optimism about future output over the coming year. However, this confidence level saw only a slight increase from May's near three-and-a-half-year low, remaining the second-weakest reading since December 2022.
Overall, the composite index, which combines services and manufacturing activity, also declined, indicating that private sector output contracted at its fastest pace in three months.