Business activity in the Kazakh services sector improved for the second consecutive month in April, with the rate of expansion quickening to the fastest recorded since July 2022, according to PMI survey data released by Tengri Partners and S&P.
Despite the improvements, firms nevertheless registered a further loss in confidence with the degree of optimism registering a 30-month low in April.
The seasonally adjusted Business Activity Index printed a nine-month high of 53.9 in April, up from 50.9 in March (50.0 = no change), signalling a solid expansion in activity. The latest upturn in service sector activity was supported by a sharp rise in new business, leading firms to expand their workforce numbers.
Service sector firms also reported a pronounced rise in expenses in April, although the pace of input price inflation was the slowest since August 2020. Despite further signs of cost inflation softening, services firms across Kazakhstan raised their charges at a slightly quicker pace than was the case in March.
Business sentiment at the service providers weakened further, with concerns regarding future economic and demand conditions weighing on optimism. Nonetheless, 17% of panellists were upbeat with regards to the outlook for business activity in the coming 12 months, compared to 2% that were pessimistic.
Anuar Ushbayev, managing partner and chief investment officer at Tengri Partners said: "The second quarter started on a solid footing for service providers in Kazakhstan. A rapid increase in incoming new business translated to the quickest rise in service sector activity for nine months. Furthermore, there were again signs that the stubbornly high inflation seen in recent years is moderating. In fact, cost burdens rose at the weakest pace since August 2020.”
"However, Kazakh service firms erred on the side of caution, as sentiment dipped to a 30-month low. Concerns regarding the future economic climate dampened the level of optimism within the sector."