MOSCOW Reuters - Conditions in Russia's services industry declined for the second month running in November, as companies struggle to cope with Western sanctions, weak consumer demand at home and logistics challenges, according to a business survey released Monday.
The S&P Global Purchasing Managers' Index PMI for Russian services climbed to 48.3 after hitting an eight month low of 43.7 a month earlier in the day, but remained below the crucial 50 mark that separates expansion from contraction.
In a significant turnaround from a month earlier when President Vladimir Putin's order to call up more than 300,000 reservists to fight in Ukraine was weighing on the economy - firms reported only a marginal decline in new business during November, S&P Global said.
The mobilisation order saw demand fall across the economy, as hundreds of thousands of men joined the army or fled Russia and a new wave of economic uncertainty hit the country.
The latest PMI surveys show signs that Russian firms are trying to recover from the initial economic blow.
A sister survey released last week showed that Russia's manufacturing industry expanded at its fastest pace in almost six years during November.
Russian service companies are not out of the woods yet, as they face a lot of challenges due to sanctions and the ongoing impact of what Russia calls a special military operation in Ukraine.
In November, export orders fell faster than a month earlier, S&P Global said, while domestic demand remained weak, with employment levels falling and prices for supplies and logistics on the rise.