Business activity rebounds after December decline

Activity growth resumed following a slight decline in the previous month, supported by a solid uptick in new business. / Collage by Kursiv.media, photo editor: Dastan Shanay

In January, the Business Activity Index calculated by Freedom Holding Corp. and S&P Global rose to 51.3 from 49.7 in December. The index ranges between 0 and 100, with a reading above 50 indicating growth and below 50 indicating contraction.

The index is based on a single question that asks about changes in the volume of business activity compared to the previous month.

«The latest increase in service sector activity, though modest, was the most pronounced since July of last year,» Freedom Holding Corp. said in a statement on Kazakhstan Services PMI® for January 2025.

A strong rise in new business received in January supported renewed activity across the Kazakh service sector. Growth has now been observed in each of the last three survey periods, with the latest round of expansion being the most significant in six months. According to panelists, improvements in demand trends, successful marketing campaigns, and the introduction of new services contributed to the growth.

Increasing volumes of new business also led firms to expand their workforce. In January, payroll numbers rose for the fifth consecutive month, with the latest round of job creation being among the most significant since the series began in March 2019.

Growth at the start of the year is expected to continue as we progress further into 2025, with businesses expressing high levels of confidence. Optimism was the highest in ten months and historically elevated. The positive sentiment was driven by expectations of improved demand conditions, a better geopolitical situation, and plans for advertising and introducing new services.

However, January’s data also revealed intensified inflationary pressures across the Kazakh service sector. Cost burdens rose at a faster pace, with the latest increase being sharp and the strongest since March of last year, although still muted by historical standards.

An improving demand environment allowed service providers to effectively pass on costs to clients. January saw a sharp rise in charges, with the rate of output price inflation reaching an 11-month high, surpassing the long-term average.