Russian Services Gauge Tops Forecasts as Upturn Reaches 5 Months
(Bloomberg) -- A gauge tracking Russian service industries from restaurants to telecommunications grew more than forecast by economists, expanding for a fifth month as new business surged at the strongest pace in almost a year.
The Services Purchasing Manager's Index rose to 53.8 last month from 51.8 in May, remaining above the threshold of 50 that separates contraction from growth, Markit Economics said Tuesday in a statement. That was better than every forecast in a Bloomberg survey of five analysts, whose median estimate was was for an advance to 52.2.
Sustained gains in consumer spending and investment are needed to propel a recovery from Russia's longest recession in two decades following the collapse in oil prices and sanctions imposed over Ukraine. As the ruble lags a rebound in commodity markets, a weaker exchange rate is helping local producers, with some companies pointing to the currency advantage as one factor for the expansion in new work, according to Markit.
“Russia's service sector experienced a sustained improvement in business activity, mirroring the gain in momentum recorded across the manufacturing sector,” Tim Moore, senior economist at Markit, said in the statement. “However, staff hiring was broadly unchanged in June, with firms noting that spare capacity and caution about the business outlook continued to hold back jobs growth.”
Markit's Composite Output Index indicated the fastest pace of growth in Russia's private industries since February 2013 after its index of manufacturing jumped last month.
The ruble, which lost 20 percent against the dollar in 2015, has gained more than 15 percent this year, the fourth-best performer globally. It weakened 0.6 percent to 64.3225 against the dollar at 11:11 a.m. in Moscow. The Micex Consumer Goods & Services Index has slipped 4.5 percent this year, underperforming the broader Micex Index, which is up 7.9 percent.
--With assistance from Zoya Shilova To contact the reporter on this story: Olga Tanas in St. Petersburg at otanas@bloomberg.net. To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Paul Abelsky, Andrew Langley
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