Growth of Russia’s service sector continued in March, with the rate of expansion improving slightly from February, finishing the strongest quarter since the end of 2012, according to the Services PMI report by Markit published on April 5.

Earlier the same week Markit showed Russian manufacturing continuing its strongest expansion since 2011 in March, with the manufacturing PMI score of 52.4, almost the same as the previous month’s 52.5, while positive sentiment amongst Russian manufacturers reached a 22-month high.

For the services sector in March, “growth was again supported by rising levels of incoming new business, and service providers faced capacity constraints as evidenced by an increase in backlogs of work,” according to the report.

Markit Russia Services Business Activity Index posted 56.6 in March, improving from 55.5 seen in February and being well above the 50.0 no-change mark indicating a strong pace of growth. For the first quarter of 2017 overall, the index showed the best pace of expansion since the fourth quarter of 2012.

Together with the growth of manufacturing index in March, Russia Composite Output Index was pushed to 56.3, up from 55.4 seen in February.

“The composite index figure for March reflected solid growth across both sectors, and quarterly data suggested the strongest performance since Q2 2008”, Markit economist Sian Jones commented on March numbers. 

“With employment and business activity showing improved trends in quarter one, this is a positive step towards a recovery,” he added. 

Although there was a fractional dip in sentiment of service providers in March, “confidence over the first quarter as a whole was the best recorded by the survey since the first quarter of 2013,” the report reads. 

Panellists in the service sector noted that strong underlying customer demand and new product development were reasons to be optimistic, while the sentiment in manufacturing, meanwhile, reached an almost two-year high.