Russia Services PMI climbs to 51.1 in July from 47.6 in June - S&P Global

MOSCOW. Aug 5 (Interfax) - The Russia Services PMI rose above the critical threshold to 51.1 points in July from 47.6 points in June, S&P Global research data show.

The latest data point to the resumption of growth in the sector at the strongest pace since March. Companies attributed the increased business activity to better demand conditions and the growth of new orders, the report said.

The Russia Composite Output Index, which tracks activity in both the services and manufacturing sectors, rose to 51.9 points in July from 49.8 points in June.

Index readings above 50.0 points indicate growth in business activity, while those of less than 50.0 show a decline.

After a contraction in June, new orders in July grew at their fastest pace since April amid acquisition of new customers. However, the overall pace of their growth was negligible and lower than the historical average.

Nonetheless, amid the growth of new orders companies added workers last month. Furthermore, the rate of job creation was the highest since March and historically high overall. The amount of uncompleted work fell for the fourth consecutive month.

However, companies reported historically elevated growth of cost burdens, with cost inflation accelerating to the highest level since January. Some respondents linked the increase in operating expenses to supplier and wage costs.

Accordingly, companies sharply raised factory-gate prices, which rose at their fastest pace in six months.

Companies remained optimistic about the sector's business prospects due to hopes for stronger demand and attracting new customers, but the degree of optimism declined for the second consecutive month to its lowest this year.