2017 Saw Stagnation in Most Service Categories Even As Retail Sales were Growing

15 may 2018

In 2015–2016 paid services offered to the public in Russia did not see the same kind of sharp decline in demand as in consumer goods. In 2016 and 2017 sales of services increased by 0.7% and 0.2% year-on-year respectively and in early 2018 there is a growth rate comparable with that seen in retail, Analytical Center experts write in their new bulletin on the current trends in the Russian economy.

Sales of services in real terms remained at roughly the same level even as consumer goods sales declined and rose (given comparable levels of inflation). The experts are of the opinion that this trend has resulted in a situation where the share of paid services in the consumer spending of households increased to 21.2% in 2016–2017 from 20.7% in 2015 and 20.2% in 2014. Such shifts in the spending structure reflect the low base effect having to do with the unique make-up of consumer spending in Russia where the share of paid services has always been significantly lower than in both developed economies and in some emerging markets.

A key contribution to the renewed growth in real terms of the sales of paid services to the public in Russia in 2016 was made by transport services, whose sales increased by 6.1% against 2015, the experts note. The negative impacts resulted primarily from communications services whose sales fell by 2.3%. In 2017, it was the other way around, sales of transport services fell 1.5% while sales of communication services rose by about 2%, according to the analysts' estimates. For the majority of service categories, as well as for the sector as a whole, 2017 was a year of stagnation while retail sales of consumer goods were growing.

Experts also believe that a key contribution to the increase in the growth rate of the paid public services sector in Q1 2018 was made by utilities (+1% on Q1 2017), transport (+1.3%), medical services (+3.9%) and domestic services (+1.8%).

For more details see the bulletin “Specific Features of Paid Services Consumption”

For other bulletins on the current trends in the Russian economy see the Publications section.