Kazakhstan’s manufacturing sector remained in contraction mode at the end of 2023, according to the December purchasing managers’ index (PMI) data from Tengri Partners and SPI Global.

Sustained reductions in new orders led firms to cut production to the largest degree in almost two years, with purchasing activity, employment and inventories all scaled back, according to Tengri Partners.

“Supplier delivery delays were the most pronounced for a year, but rates of inflation softened,” it added.

The headline Kazakhstan Manufacturing PMI for December rose to 48.6 from 48.0 in November, but remained below the 50.0 no-change mark and thereby signalled a second successive monthly deterioration in business conditions for Kazakh manufacturers.

Despite the declines at the end of the year, the average PMI reading in 2023 was the highest since the survey began in 2019 thanks to a period of solid growth through the middle part of the year, Tengri added.

Anuar Ushbayev, managing partner and chief investment officer at Tengri Partners, said: "After a positive performance during much of 2023, the Kazakhstan manufacturing sector ended the year on a negative note. Demand continued to suffer, leading firms to scale back production to the largest degree in almost two years.

“With confidence in the outlook also waning, the prospects for a quick rebound don't appear bright. Firms will therefore be hoping that a pick-up in demand starts to materialise in the early months of 2024 to get the sector back on track."