Activity across Russia's services sector expanded in May, spurred by another rise in new business and renewed strength in foreign markets, a business survey showed on Monday, leading firms to increase hiring.

The S&P Global Purchasing Managers' Index (PMI) for Russian services dropped to 54.3 in May from 55.9 a month earlier, but remained above the 50 mark that separates expansion from contraction for the fourth month running.

"The solid upturn in output was driven by another increase in new business as firms noted new client wins and strength in foreign markets," S&P Global said in a statement.

New export business expanded for just the second time in the last 15 months and was the fastest growth since June 2021.

S&P Global said that higher new business from abroad was linked to greater demand from key export markets.

Russian firms' export business has struggled while Moscow has been conducting what it calls a "special military operation" in Ukraine.

Employment expanded at its second-fastest pace since June 2021 as firms raised workforce numbers to accommodate greater business requirements and increased new orders, S&P Global said.

Business confidence, though expanding, dropped to a four-month low.

"Nonetheless, companies remained broadly upbeat regarding the outlook for output over the coming year amid hopes of further upticks in demand and planned investment in marketing," S&P Global said.

A sister survey published last week showed activity in Russia's manufacturing sector increased for the 13th month running in May and employment rose at its sharpest pace in more than two decades, though export orders contracted.

(Reporting by Alexander Marrow; Editing by Toby Chopra)