The Freedom Holding Corp. Kazakhstan Manufacturing PMI® (Purchasing Managers’ Index™) fell to 47.9 in August from 49.9 in July, posting below the 50.0 no-change mark for the third month running and thereby signalling a deterioration in business conditions midway through the third quarter of the year. Moreover, the health of the sector worsened to the largest extent since March 2022.
According to Yerlan Abdikarimov, director of the Financial Analysis Department at Freedom Finance Global PLC, this adverse trend reflects the accumulated pressure of several factors – weak demand, high volatility in commodity markets, rising operating costs, as well as increased currency and tax pressures.
«Market participants maintain moderate optimism, keeping expectations for the year at the lowest levels in recent years. The recovery of business activity is directly linked to the stabilization of macroeconomic conditions, strengthening the internal resilience of companies, and the timely launch of investment projects in the sector,» he said.
New orders decreased in August, thereby ending a sequence of growth stretching back to February 2024. Although modest, the contraction was the sharpest since November 2023. Where new business decreased, panelists reported weak customer demand.
The fall in new orders, and some pauses in production for machinery repair work meant that output decreased for the third consecutive month during August. Moreover, the rate of contraction was solid and the fastest for a year and a half. Alongside the reduction in current output, firms also became less optimistic about future production in August. Sentiment waned for the second consecutive month and was the lowest since December 2021.
On balance, however, manufacturers were still confident that output would rise over the coming year. Optimism was centered on plans to expand product ranges and upgrade machinery.
In July, the PMI index rose to 49.9 from 49.7 in June, although it has remained below the 50 threshold for the second straight month.
