Activity across Russia's services sector contracted last month for the first time since January 2023, a business survey showed on Wednesday, hit by subdued demand and near stagnation in new business.

The S&P Global Purchasing Managers' Index (PMI) for Russian services fell to 49.8 in May from 50.5 in April, moving below the 50 mark that separates expansion from contraction for the first time in 16 months.

New business growth fell to its weakest since January 2023 with some companies noting a drop in customer numbers, S&P Global said.

By contrast, new export orders grew at the fastest rate since September and at a historically elevated pace.

"Anecdotal evidence suggested that greater demand from key export markets and client wins in new destinations supported the upturn (in export orders)," S&P Global said.

Input prices increased more quickly, with panelists noting higher transport and supplier costs, as well as increased wages.

Despite the overall contraction in the services sector, businesses remained confident about the future.

"Optimism was reportedly underpinned by hopes of stronger customer demand and the acquisition of new clients," S&P Global said.

A sister survey on Monday showed that activity in Russia's manufacturing sector grew marginally faster in May as demand picked up. (Reporting by Alexander Marrow Editing by Christina Fincher)