Sanctions and oil prices continue to crush the Russian economy, presumably putting Vladimir Putin at some risk for holding his leadership in the country.

According to Markit:

Russian service providers began 2016 in disappointing fashion, as business activity levels declined further. This fall was driven by a solid contraction in new business levels, leading to another deterioration in backlogs of work.

Meanwhile, job shedding persisted throughout the sector as firms turned pessimistic towards their future outlook for activity. Input prices continued to rise at a much quicker pace than average charges.

Operating conditions in the sector remained challenging, as highlighted by the seasonally adjusted Markit Russia Services Business Activity Index recording 47.1 in January. Down from 47.8, the latest reading signalled the quickest decline in output for ten months. Panellists linked falling activity to stagnant market conditions and unfavourable exchange rate movements.