After only a marginal increase above the no-change mark seen in the manufacturing sector in March, the growth rate in the services sector dipped into eight-month low, according to the IHS Markit report of April 4, but remains strong.

The IHS Markit Russia Services Business Activity Index posted 53.7 in March, down from 56.5 in February, and although "the rate of business activity growth softened to an eight-month low, it was solid nonetheless," Markit wrote while noting that the average over the opening three months of 2018 was strong overall.

Following weak performance on the manufacturing side, the Russia Composite Output Index (covering both manufacturing and services) posted 53.2 in March, down from 55.2 in February.

The latest composite rise in output was the joint-weakest since September 2016, with both manufacturers and service providers indicating a slower expansion. 

Still, while the service sector looked more favourable, a number of panel members attributed the rise in output levels to the acquisition of new clients and increased customer activity. However, "reflective of slightly fragile demand conditions, new business received by Russian service providers expanded at a weaker pace in March."

In line with higher staffing capacity backlogs contracted further, and at a solid pace, the report notes, while price pressures remained muted in the context of the series history despite rates of inflation accelerating. 

Expectations towards business activity over the coming year in the services sector dipped to a four-month low in March, with many panellists attributed optimism to the ongoing expansion in output. At the same time some raised concerns over the stability of demand.