MOSCOW (Reuters) - Russia's service sector eked out growth in August, expanding for the first time since February as more new business and a rapid rundown in the volume of outstanding orders helped offset the impact of the Ukraine crisis, a survey showed on Wednesday.
The HSBC purchasing managers' index (PMI) for the service segment of the Russian economy, which accounts for around 60 percent of gross domestic product, rose above the 50 line denoting growth to 50.3 last month from 49.7 in July. It had been below 50 for five months.
Sanctions imposed on Russia for its foreign policy on Ukraine and the threat of more measures against Moscow have weakened the prospects of the country's economic wellbeing, with some economists warning of a recession this year.
Data on Monday showed that Russia's manufacturing also managed to expand in August.
But Alexander Morozov, chief economist for Russia and CIS at HSBC, said there were no reasons to celebrate.
"Despite a rise in new business volumes in services, outstanding business accelerated its decline, which might indicate that the current level of business activity exceeds demand," Morozov said.
"If so, sustaining positive business activity growth would require a stronger rise in new demand, which looks unlikely in the current economic and geopolitical environment."
The poll showed weakening business expectations that could signal deteriorating growth prospects in services.
"This recovery looks very fragile amid the prevailing downside risks," Morozov said.
(Reporting by Lidia Kelly; Editing by Hugh Lawson)