Kazakhstan manufacturing PMI declines to a 14-month low
The Freedom Holding Corp. Kazakhstan Manufacturing PMI® (Purchasing Managers’ Index™) remained above the 50.0 no-change mark for the fourteenth consecutive month in April, signaling a sustained period of strengthening business conditions. That said, at 51.2, the latest reading was down from 52.7 in March, marking the lowest point in the current sequence of improvement. The sector’s health strengthened slightly at the start of the second quarter.
According to Yerlan Abdikarimov, head of the Financial Analysis Department at Freedom Finance Global PLC (a 100% subsidiary of Freedom Holding Corp.), business activity in the manufacturing sector remains in the optimistic zone, although the index has declined to a 14-month low. Growth has slowed, despite previously announced government initiatives aimed at supporting new investment projects in the industry.
This adjustment can be explained by a combination of external factors — increased trade tensions and pressure on commodity markets — and internal ones, such as rising utility tariffs and currency volatility. In response, companies have increasingly passed risks onto product prices. Nevertheless, industry representatives continue to show confidence in the future: expectations for the next 12 months exceed the levels seen in the second half of last year.
Input costs continued to increase sharply during April, with firms often linking higher prices to unfavorable exchange rate movements. Rising metal and utility prices were mentioned in particular. That said, the pace of inflation eased to a four-month low and remained softer than the series average.
Finally, companies remained confident that production would rise over the coming year, with optimism linked to positive expectations regarding new orders, in some cases due to advertising plans. That said, the level of positive sentiment dropped to a four-month low in April and was just below the series average.
In March, Kazakhstan’s manufacturing industry was finishing the first quarter with steady growth, reporting increases in production volumes, new orders, employment, and purchasing activity.
Freedom Holding Corp.’s Kazakhstan Services Purchasing Managers’ Index (PMI®) is compiled by S&P Global using responses from purchasing managers at approximately 250 service industry companies. The sample of respondents is structured by industry and number of employees, taking into account their contribution to GDP. The study was launched in March 2019. Data is collected in the second half of each month and reflects changes compared to the previous period. For each variable, a diffusion index is calculated as the sum of the share of «growth» responses and half the share of «no change» responses. Index values range from 0 to 100: values above 50 indicate growth, while those below 50 indicate decline. The final indicators are adjusted for seasonal variation.
