Moscow: A significant increase in business activity in Russia in February indicated a significant increase in output in the services sector, S&P Global reported on Friday.

The Composite Purchasing Managers' Index (PMI), which measures growth in private sector business activity, rose from 49.7 to 53.1 on the back of a sharp increase in manufacturing output and renewed growth in service sector output.

Growth and contraction are separated by a reading of 50 or higher.

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As per the report, the increase in business activity was attributed to a combination of factors, including increased customer demand, addition of new customers, and increased customer interest due to reduced uncertainty.

The rate of expansion was the second fastest since July 2021 and marked the first increase in production since September 2022.

A more optimistic outlook for the coming year among customers and increased optimism from firms were both related to a stronger customer demand.

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In response to the improving business environment, service providers increased their staffing levels by the same time for the first time in seven months.

S&P reports that companies in the services sector have seen the fastest increase in new orders since August 2022, with an overall solid rate of expansion.

Input prices increased at the slowest rate in February since August 2021, easing cost pressures across the industry.

For the second month in a row in February, Russian service providers reported optimism in the year-ahead outlook for activity, according to the rating agency.

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Despite being slightly below the series average, the confidence level increased and reached its highest level since July 2022. Positive expectations were supported by rising customer demand and expectation of launch of new service lines, it concluded.