Manufacturing industry reports lowest growth over past nine months

The Freedom Holding Corp. Kazakhstan Manufacturing PMI® (Purchasing Managers’ Index™) remained above the 50.0 no-change mark again in January, the eleventh consecutive month in which this has been the case. That said, the reading was down from December’s survey record of 53.9 to 51.5, signaling a modest strengthening of business conditions which was the least pronounced since last April.

In early January the manufacturing industry reported an increase in new orders. Panelists reported the signing of new contracts amid improving demand.

The rise in new orders encouraged firms to expand production, although, in line with the headline index, the pace of growth slowed markedly from the previous month’s record. Production has risen continuously since March 2024.

Higher production requirements resulted in rises in both employment and purchasing activity. Staffing levels were up for the eleventh consecutive month, albeit modestly. Meanwhile, the pace of expansion in purchasing activity remained marked.

Backlogs of work increased, however, amid reports that material shortages had delayed project completion. This was the first accumulation of outstanding business in six months.

Input costs increased sharply, with the rate of inflation quickening for the third consecutive month to the fastest since last August. Exchange rate weakness, particularly against the US dollar, was often mentioned, while higher prices for raw materials and electricity were also reported.

Output prices also continued to rise, but here the pace of inflation eased to the weakest since June 2024.

Business confidence rose sharply at the start of the year, hitting a seven-month high. More than half of respondents predicted a rise in output over the next 12 months, and sentiment was also stronger than the series average. Optimism was linked to the imminent signing of new contracts and the planned expansion of production lines.