S&P Global’s research indicates that Kazakhstan’s manufacturing industry has shown the highest growth rate over the past five and a half years. The industry is reporting the highest employment rate, an increase in output and an inflow of new orders.
S&P Global’s Purchase Manager’s Index (PMI) in the manufacturing industry has reached a record-breaking 53.3 points in August, whereas July’s result was 51.7. The previous growth record was reported in June 2022. The analysis shows the industry has been growing for six months in a row.
One of the reasons for the improvement in the manufacturing industry’s climate was the surge in employment that began in March 2019. The enterprises significantly expanded their personnel; 15% of responding companies confirmed hiring additional staff, mostly full-time.
The increase in output contributed to a rise in employment, while production levels in August had been growing steadily for six consecutive months. The analysts say that the growth pace soared in September 2023.
In turn, entrepreneurs believe that the increase in output was driven by the rise in order intake. S&P Global noticed that the demand is rising, factories have started winning bids and getting new bulk orders and the purchasing power has been continuously growing since March.
“Buoyant demand spread through the manufacturing sector in August, culminating in a record expansion in employment and the most marked improvement in the health of the sector since the survey began in March 2019. Although there are some doubts among firms that growth will continue at current levels, we should hopefully at least see the expansion in the sector settle at a sustainable pace over the months ahead,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.
At the same time, raw material prices soared in August. The inflation rate accelerated for the third consecutive month, reaching its highest point since November. In some cases, inflation was exacerbated by unfavorable exchange rates.
The finished product price growth also accelerated as enterprises began to shift the burden of their costs on to customers. The rate of price surge reached its peak in August over the past six months. In contrast, overall inflation in August slowed from 8.6% to 8.4% YoY.
Despite the positive business environment now, many businesses doubt that this strong demand will last long. The so-called manufacturers’ optimism has now fallen to a two-year low. Overall, though, businesses remain confident that the number of orders and output will increase next year.
The S&P Global Kazakhstan Manufacturing PMI is based on responses from procurement managers of around 250 enterprises. The responses are collected in the second half of each month and indicate the direction of change compared to the previous month. The panel covers data by sector and company size, considering their contributions to GDP.
