Russia's services downturn deepens as new business falls at fastest pace since December 2022, PMI shows

MOSCOW, July 3 (Reuters) - Russia's services sector contracted further in June as weaker client demand drove steeper falls in output and new orders, a business survey showed on Friday.

The S&P Global Russia Services PMI Business Activity Index fell to 48.2 in June from 48.7 in May, a survey by S&P Global showed. The 50-mark separates growth from contraction.

Output fell for a fourth straight month, and the pace of decline was the fastest since September 2025, with firms citing subdued customer demand and a sustained drop in new orders.

New business decreased for a third consecutive month, with the rate of contraction accelerating to the fastest since December 2022. Firms linked lower sales to reduced customer purchasing power and financial difficulties among clients.

Employment fell for a fifth month as companies cut costs and did not replace voluntary leavers. The pace of job shedding was the steepest in three-and-a-half years, while backlogs continued to decline at the second-fastest rate since December 2022.

Price pressures eased further in June. Input cost inflation slowed for a fifth straight month to its weakest this year, while selling price inflation softened to its slowest pace since January 2021 as some firms discounted to support sales.

Although firms remained optimistic about output over the coming year, confidence rose only slightly from May's near three-and-a-half-year low and was still the second-weakest since December 2022. 

The composite index also fell, with private sector output contracting at its fastest pace in three months.

(Reporting by Gleb Bryanski; Editing by Toby Chopra)