Kazakh services PMI shows solid expansion in September

Kazakh services PMI shows solid expansion in September
/ Tengri Partners, S&P Global
By bne IntelIiNews October 5, 2023

Services activity growth in Kazakhstan showed a solid expansion in September, according to the business activity reading of the Tengri Partners purchasing managers' index (PMI) for the month.

The reading improved to 52.3, up from the six-month low of 50.2 registered in August. 

That marked the first month on month improvement recorded since the April peak. Any reading above 50 indicates an expansion.

Tengri Partners noted that, while both business activity and the influx of new work increased at stronger rates in September compared to August, there was a second consecutive monthly decline in the number of employees, although this downturn moderated throughout the month.

Additionally, there was another significant increase in cost burdens, leading to a faster rise in selling prices. Both cost and price increases remained at historically high levels.

Anuar Ushbayev, managing partner and chief investment officer at Tengri Partners, said: "The Kazakh service sector revealed renewed growth momentum as the third quarter came to a close. Stronger upticks were recorded for both new business and activity. Moreover, increases in business requirements allowed some firms to raise their staffing levels, helping to soften the current downturn in employment.

“However, cost inflationary pressures were the strongest in seven months. Service providers continued to face increasing cost pressures, coming through in the form of higher prices for raw materials, fuel and rising supplier charges. This in turn resulted in a quicker uptick in selling prices. Going forward, inflation and the uncertain geopolitical environment will continue to act as headwinds to the sector. Nonetheless, demand has remained resilient, with firms anticipating improvement in the year ahead, thus supporting further expansions in services activity."