Freedom Holding Corp. Kazakhstan Services PMI® reports solid rise in new businesses
The latest PMI® data by Freedom Holding Corp. and S&P Global indicated a renewed rise in new business received at Kazakh service providers in November, thereby overturning the fall experienced in the month prior. Similarly, a fresh rise in activity was also observed in the latest survey period.
Meanwhile, cost pressures remained subdued, enabling firms to pursue more competitive pricing strategies. Average output charges for Kazakh services increased at the slowest pace since December 2020.
The headline figure is the Business Activity Index. This is calculated from a single question that asks for changes in the volume of business activity compared with one month previously. The index varies between 0 and 100, with a reading above 50 indicating an increase and below 50 a decrease. The index is adjusted for seasonal variation.
In November, the seasonally adjusted Business Activity Index rose above the neutral 50.0 threshold, which distinguishes expansion from contraction. With a reading of 50.8, up from 49.0 in October, the latest data indicated that activity within the Kazakh service sector increased at a modest pace.
This uptick in business activity was supported by a renewed rise in new business received by Kazakh service providers. Surveyed businesses cited new contract wins, successful marketing campaigns, the introduction of new products and heightened competition as contributing factors.
«November saw a recovery in business activity among Kazakhstan’s service sector, with a noticeable increase in the number of new orders. Service providers reported successful marketing campaigns, the launch of new products, and a rise in demand. It appears that service providers have nearly completed their staffing needs, as the hiring pace has become more moderate compared to the previous two months. Long-term easing of inflationary pressures, despite the continued rise in certain costs and utility prices, has contributed to an increase in sector competitiveness,» Yerlan Abdikarimov, Director of the Financial Analysis Department at Freedom Finance Global PLC said.
In response to increased business demands, service providers in Kazakhstan expanded their workforce numbers. November marked the third consecutive month of job creation, with companies reporting the hiring of full-time employees. However, due to varying trends in new business, firms approached hiring with caution, resulting in the most recent round of job creation being only marginal and the weakest in the current growth sequence.
Turning to prices, similar to what was observed in the previous two months, cost pressures rose only slightly. The rate of input price inflation remained well below the historical average and was among the weakest on record since the series began in March 2019. Where firms reported higher business expenses, this was linked to higher material costs and utilities.
Subdued cost pressures allowed Kazakhstan’s service sector to adjust their charges accordingly. While output charges were raised once again in November, the rate of inflation was the weakest since December 2020. Anecdotal evidence also indicated that some firms reduced their prices to enhance their competitiveness.
Kazakh service providers expressed optimism regarding the outlook for activity, with confidence levels increasing over the month to reach a three-month high, and posting above the long-term survey average. This positive sentiment was supported by plans for new product launches, increased investments, marketing strategies, and expectations of improving demand trends.
