MOSCOW, April 3 (Reuters) - Russia's services sector contracted in March for the first time in six months as demand softened and new orders broadly stalled, a business survey showed on Friday.
The S&P Global Russia Services PMI Business Activity Index fell to 49.5 in March from 51.3 in February, dropping below the 50 mark separating growth from contraction.
New business was broadly unchanged after four months of expansion, as some firms cited lower client purchasing power, greater uncertainty and lost
work linked to the war in the Middle East.
Employment fell for a second straight month and at the quickest pace since January 2023, as companies cut staff amid cost considerations and subdued sales.
Price pressures eased further from January's VAT-driven highs. Input cost inflation slowed for a second month but remained among the fastest since the start of 2025, while selling price inflation cooled to a three-month low.
Backlogs of work rose for a sixth month, although the pace of accumulation slowed. Firms were more optimistic about output over the next 12 months than in February, but confidence levels remained among the lowest seen in more than three years.
The S&P Global Russia Composite PMI Output Index fell to 48.8 in March from 50.8 in February, signalling a renewed decline in private sector activity as manufacturing and services output both contracted.
(Reporting by Gleb Bryanski; Editing by Hugh Lawson)
