Kazakhstan reports decline in business activity
The Business Activity Index reached 49.7 in December, down from 50.8 in November. The rate slipped back into contraction territory for the second time in three months, according to Kazakhstan Services PMI® prepared by Freedom Holding Corp. and S&P Global.
The Business Activity Index is calculated from a single question that asks 250 managers 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.
Even though some service providers noted that heightened market competition influenced some firms’ decisions to scale back their business activities, demand for services in Kazakhstan continued to rise, marking a second consecutive month of growth in December. Although the expansion rate eased slightly from November, it still represented a modest intake of new business that exceeded the average for 2024.
Moreover, employment increased for the fourth consecutive month, reflecting businesses’ readiness to hire in response to growing demand. However, the latest round of job creation was only fractional and the weakest in the aforementioned sequence.
Regarding prices, cost burdens and charges rose at modest rates, although in both cases, inflation rates quickened slightly in December. Respondents linked this to higher utility costs and currency weakness.
Looking ahead, firms are optimistic about a rise in activity over the coming year. Expectations for improved demand trends and plans to invest in marketing and new services are expected to underpin growth. The degree of confidence in December strengthened to a nine-month high and was stronger than the average since the series began in March 2019.
«In December, while we saw a slight drop in activity within the service sector, signaled by the headline index dropping to 49.7, the broader trend of strengthening demand remained intact. Companies continued to attract new clients, with demand for services in Kazakhstan improving as the year ended,» said Yerlan Abdikarimov, director of the Financial Analysis Department at Freedom Finance Global PLC.
The Kazakhstan Composite PMI Output Index again signaled a rise in activity, posting 51.6 in December, slightly down from 51.9 in November. However, unlike November, activity expansion was solely dependent on the manufacturing sector, where a record rate of growth was achieved. The Composite PMI Output Index is a weighted average of the Output Index and the Services PMI. It shouldn’t be confused with the overall Manufacturing PMI.
