Drop in business activity in the services sector of the Russian Federation in March was the highest in 11 years
AGN Moscow / Sofia Sangerska
the Fall in business activity in the services sector of the Russian Federation in March of this year was the highest for 11 years. As the findings of the study: IHS, Markit, referenced by “Interfax”, the index of growth of Russian service sector in March 2020 fell to 37.1 points from 52 points in February. Prior to this growth lasted from July 2019, but in February of this year the rate was the lowest in seven months amid declining domestic demand.
the Aggregate output index that tracks activity in the manufacturing sector and in services of the Russian Federation, in March was 39.5 points versus 50.9 points in February. The value of the index above 50 points indicates growth of business activity below this level – its decline.
the Message received from the service sector of the Russian Federation, suggests that the decline in business activity in March was caused by low consumer demand and the closure of the business after the escalation of the pandemic coronavirus, which has led to a sharp drop in new orders. The rate of decline in new export orders was the highest in the history of data collection in this series, from September 2014. Due to the fact that some customers have closed their businesses in compliance with public health measures, total sales in the services sector of the Russian Federation declined in March at the fastest pace since February 2009.
the Decrease in demand for services amid juiceoccur in new orders led to a strong fall in employment in March. But the pace of decline in jobs accelerated to the fastest since January 2016. At the same time the fall in new orders allowed companies of sphere of services of the Russian Federation to process the previously received orders. In this regard, the backlogs were generally sharp and the strongest since July last year.
the Uncertainty regarding the duration of the outbreak and timing of a recovery in demand had a negative impact on the expectations of service providers at the end of the first quarter. As a result, business confidence in March was the lowest in the entire history of the series. And the depreciation of the ruble and the lack of suppliers after the closure of factories and delays in transportation led to higher prices. However, despite weak demand, the company was able to partially transfer the costs to customers by increasing selling prices.
