Business activity index declines in Kazakhstan

Businesses' perception of the current conditions dropped to a negative 6.3 in July

In July the index of business activity in Kazakhstan decreased to 48. In June it was a bit higher at 48.9. Also, the rate of perception of the current business conditions by companies dropped to 6.3 while in June the rate was at 4.0. The National Bank of Kazakhstan believes that this negative balance of responses is a result of a bigger number of respondents who have taken part in the survey.

Nevertheless, when talking about the index of business activity, Kazakhstani businesses point out fewer orders in several industries and the longer time needed to get raw materials from suppliers.

«In July the index almost didn’t change for the service sector, while it declined in the producing sector (48.5), mining industry (46.2) and construction sector (47.0),» the bank said.

The forecast for business conditions in the upcoming six months also dropped to 18.0 (23.9 in June). «As a result, the average assessment of the current and future business conditions dropped to 5.4 (13.6 in June). The indicator of business cycle moved in July from an area of ​​growth to a zone of recovery,» the regulator reported.

However, in July, companies reported better demand from consumers – 4.3 (1.8 in June).

«According to respondents, the demand is recovering in the industrial and service sectors,» the National Bank highlighted.

The index of business activity has been decreasing in Kazakhstan since May. In May it dropped by 0.5 points to 49 while it was 49.5 in April. On the other hand, the index grew to 50.9 in the producing sector (50.5 in May). In the service sector and mining industry, business activity dropped to 48.8 and 48.3 respectively.

Business activity has been under pressure since March due to rising geopolitical tensions and uncertainty in terms of economic growth in the future.

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