Kazakhstani manufacturers report sharp drop in new orders
In September, Kazakhstan’s manufacturing sector reported the steepest decline in new orders in four and a half years. The Freedom Holding Corp. Purchasing Managers’ Index (PMI) remained below the critical threshold, signaling a sharp deterioration in business conditions.
Manufacturing contraction and logistics issues
The PMI stood at 46.4 points in September, up slightly from 46.0 points in August. The index has remained in contraction territory — below the 50-point mark — for nine consecutive months. Survey respondents reported a rapid decline in production volumes and a drop in employment, with the latter trend continuing for the eighth straight month. In some cases, companies were forced to halt operations due to equipment problems or turn away clients.
Manufacturers continue to report supply chain disruptions and customs delays when sourcing inputs from Russia. Due to lower production volumes, companies have sharply cut back on purchasing activity. Meanwhile, inflationary pressures have eased, with the rate of cost increases slowing to a three-year low.
Analyst assessment
According to Saltanat Mukhambetaliyeva, head of economic research and analytics at Freedom Holding Operations, the September survey results indicate that pressure on Kazakhstan’s manufacturing industries persisted.
«Weak domestic demand remains a constraint, with its effects most evident in the food and drink sector. Among firms of different sizes, the contraction in business activity accelerated at large manufacturers, while medium-sized enterprises were in a somewhat better position,» she said.
The expert also noted that the continued decline in employment amid expanding production capacity suggests that investment momentum has yet to translate into growth in new orders and employment.
«Nevertheless, market participants became somewhat more optimistic about the next 12 months, providing grounds to expect gradual stabilization in the sector,» the analyst said.
In August, analysts reported a significant deterioration in Kazakhstan’s manufacturing sector. By the end of the month, the country’s production volumes had declined for the third consecutive month amid an acute shortage of new orders. At the time, the PMI stood at 46 points, likewise signaling serious difficulties for domestic enterprises, including steadily rising production costs and supplier-related issues.
