Kazakhstan’s manufacturing sector faced renewed pressure in August. Companies recorded a fall in new orders and scaled back output, employment and purchasing activity, according to the latest Purchasing Managers’ Index (PMI) data released by Freedom Holding and S&P Global.

The index slipped to 47.9 from 49.9 in July, remaining below the no-change 50.0 mark for a third consecutive month. This pointed to a deterioration in operating conditions and marked the sharpest decline since March 2022.

The drop in new orders ended a growth streak that had lasted since February 2024, with survey respondents attributing the fall to weaker customer demand. Although modest, the contraction in new business was the steepest since November 2023.

Business confidence also softened, reaching its lowest level since late 2021.

On the price side, manufacturers reported a sharp increase in input costs, while output prices rose at their fastest pace since April, reflecting continued inflationary pressures.

Yerlan Abdikarimov, director of the financial analysis department at Freedom Finance Global commented: "August saw another sharp decline in business activity in Kazakhstan’s manufacturing sector. 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."