The Russian services sector hired them at the fastest pace in more than a year in November

MOSCOW (Reuters) – Russia’s services sector suffered its biggest contraction in more than a year in November, as customer demand fell sharply and new export orders came to a halt, a business poll showed on Friday.

IHS Markit’s Purchasing Managers Index (PMI) fell to 47.1 in November from 48.8 in October, below the 50 mark that separates expansion and contraction. It was the lowest mark in the index since October 2020.

“Demand from domestic and foreign customers weakened as companies moderated optimism about future production,” said Sian Jones, senior economist at IHS Markit survey.

Cost pressure increased. Entry prices rose at the fastest rate in six months due to higher fuel, wage and supply costs.

Employment in general did not change in November, after a marginal contraction in the previous month, but business confidence was the lowest since August.

“Demand conditions are unlikely to improve significantly until the number of virus cases in the services sector drops and COVID-19 restrictions are no longer needed,” Jones said.

He added that barriers to vaccination rates will hinder the path to recovery next year.

A separate survey on Wednesday showed that Russian manufacturing activity expanded slightly in November as growth in new demand accelerated.