Kazakhstan’s manufacturing sector recorded one of its sharpest deteriorations in business conditions in August, as weaker demand and reduced customer purchasing power drove further declines in new orders, output, employment and purchasing activity, according to the Freedom Holding Kazakhstan Manufacturing Purchasing Managers' Index (PMI) survey for the month published by S&P Global on September 1.

The Freedom Holding Kazakhstan Manufacturing PMI fell to 46.0 in August from 47.0 in July, marking its third consecutive monthly decline. A reading below 50 indicates a contraction in manufacturing activity.

The decline in new business was described as the fastest in nearly four-and-a-half years, highlighting the extent of the latest contraction in demand.

The latest deterioration extended a weakening trend seen throughout 2026. The decline in business conditions in August was also in fact among the most pronounced recorded by the survey, exceeded only by downturns in April 2020, January 2021 and January 2022.

PMI survey respondents reported difficulties securing new orders, with several firms saying customers were unable to commit to new projects because of weaker purchasing power. New business fell for a fourth consecutive month and at the fastest pace in almost four-and-a-half years.

Some manufacturers also reported suspending production because of a lack of work, with lower output accompanied by reductions in employment and purchasing activity.

The survey indicated that deteriorating demand was compounded by weaker customer pricing power, contributing to the fall in new orders and broader pressure on manufacturing activity.

Expectations for future output growth also remained subdued, suggesting that manufacturers were cautious about a near-term improvement in operating conditions.

Saltanat Mukhambetaliyeva, economics research and analytics head, at Freedom Holding operations: "The August results demonstrate a continuing downturn in Kazakhstan’s manufacturing industries. The PMI index has been below the neutral mark for 14 out of the last 15 months. New capacities and investment projects launched in the country in recent years and months certainly support the industry's aggregate indicators; however, the PMI results indicate that this impulse is still spreading unevenly.”

“In the breakdown by sectors, the most pronounced downturn in business activity in August was observed in the food industry, which is associated with another contraction in demand,” she added. “Among enterprises of different sizes, the most noticeable deterioration was recorded in the group of large manufacturers. Given their role in production chains, this creates a risk of further spreading the downturn to suppliers and related productions, including smaller enterprises and sub-sectors. To form a sustainable dynamic throughout the entire manufacturing industry, it is important that the expansion of production capabilities is accompanied by growth in orders, the development of domestic cooperation, and access of enterprises to working capital financing."