At the end of the first half of 2026, production volumes in Kazakhstan’s manufacturing sector continued to decline amid a decrease in new orders. The Purchasing Managers’ Index (PMI) by Freedom Holding Corp. slipped to 48.5, marking a steady deterioration in business conditions for the sixth consecutive month.
Production indicators and employment
In June, the PMI reached 48.5, down from 49 in May, remaining below the critical 50.0 mark. This decline is the most pronounced since March of this year.
The decline in new orders is due to overall weakness in demand and customers’ difficulties in securing the necessary financing for project launches. In response to the decline in demand, companies were forced to reduce purchasing activity and employment. This marks the fifth consecutive month of staff reductions. Meanwhile, factories’ focus on fulfilling existing contracts on time has led to a record reduction in finished-goods stocks and in the volume of unfulfilled orders.
Price pressure and logistics
Inflationary pressure increased slightly in June. Survey respondents noted rising raw material prices, exacerbated by the tenge’s depreciation against the Russian ruble. Producers passed on increased costs to customers, leading to higher selling prices.
Logistics chains also came under pressure: delivery times have increased for the fifth consecutive month. Respondents attribute this to customs delays and technical issues with electronic invoices.
According to Saltanat Mukhambetaliyeva, head of economic research at Freedom Holding Operations LLC, the sector’s dynamics indicate enterprises’ high dependence on access to financial resources, although other factors constraining production activity also persist.
«The fact that business expectations remain positive, albeit at their lowest level since the beginning of the year, may indicate that industrial firms still retain hope for an improvement in business conditions over the next 12 months. Expanding access to business financing could become one of the factors supporting market participants during a period of ongoing uncertainty and elevated volatility in regional and global markets,» she said.
In May 2026, economic conditions for Kazakhstani producers also remained challenging. The PMI stood at 49 points (48.9 in April), demonstrating a deterioration in business conditions for the fifth consecutive month. Although purchasing activity at factories temporarily stabilized in May, breaking a four-month decline, inventories of finished goods and purchased raw materials fell to seven-year lows. Such a rapid decline in raw material inventories has not been seen in the market since March 2023.
