Russia’s service sector PMI lost momentum in February as growth in services eased and manufacturing remained in contraction, according to S&P Global, with inflationary pressures still elevated despite cooling from January’s VAT-driven spike.  (chart) 

The seasonally adjusted S&P Global Russia Services PMI Business Activity Index fell to 51.3 in February from 53.1 in January, signalling a modest but softer expansion. “The upturns were relatively muted,” S&P Global said, noting that the pace of growth was the slowest in the current five-month sequence and below the long-run series trend.

In manufacturing, the downturn extended to a ninth consecutive month. The S&P Global Russia Manufacturing Purchasing Managers’ Index edged up to 49.5 in February from 49.4 in January, remaining just below the 50 no-change benchmark that separates growth from contraction. The reading signalled “only a slight decline in the health of the sector” and marked the softest deterioration in the current sequence, S&P Global said.

Reflecting the mixed picture, the S&P Global Russia Composite PMI Output Index declined to 50.8 in February from 52.1 in the opening month of 2026. The rise in overall business activity was marginal, as a slower expansion in services and a fall in manufacturing production weighed on the private sector.

Within services, S&P Global said output continued to expand on the back of greater new orders and an uptick in customer numbers. New business increased for a fourth successive month, though the rate of growth eased to the weakest since November 2025. Despite sustained demand, firms reduced employment fractionally, often opting not to replace voluntary leavers.

Cost pressures remained pronounced. Although input cost inflation cooled from January’s two-year high, it was still the second-fastest since January 2025. Companies cited the pass-through of the VAT hike as well as higher fuel and utility prices. Output charges rose at the second-steepest pace since October 2023 as firms sought to pass on higher costs.

In the composite index, S&P Global said new business growth slowed to a three-month low, with manufacturers reporting broadly unchanged new orders. Workforce numbers declined across both sectors, while overall business confidence, though positive, slipped to its lowest level since December 2022 amid concerns over rising costs and softer expectations.