Services activity growth in Kazakhstan nearly stalls in August, PMI shows

Services activity growth in Kazakhstan nearly stalls in August, PMI shows
* The red line represents the Tengri Partners Kazakhstan Manufacturing PMI Output Index. / Tengri Partners
By bne IntelIiNews September 6, 2023

Services activity growth in Kazakhstan nearly stalled in August, according to a Tengri Partners purchasing managers' index (PMI) headline business activity index. It fell to very slightly above the 50-point "no change" mark to 50.2, down from 51.6 in July. The index has fallen in every month since April's recent peak.

Services in Kazakhstan contrast with the country's expansion in manufacturing, confirmed this week by another August PMI. 

Anuar Ushbayev, managing partner and chief investment officer at Tengri Partners, said: "The latest PMI data highlighted a slowdown in the Kazakh service sector, with both business activity and new work rising at the weakest rates in six months, albeit the latter still increasing solidly.

"Softer growth, a fresh fall in employment and still historically strong price pressures, could translate into a weaker second half of the year. Moreover, international headwinds, i.e., the war in Ukraine and the global economic slowdown could only further exacerbate growth concerns. That said, surveyed businesses were largely optimistic that activity will be higher in 12 months’ time.”

While new orders continued to grow, the rate of growth weakened, reaching its lowest point in six months. This suggests a loss of momentum in business requirements within the service sector.

The slowdown in business requirements was accompanied by a decline in payroll numbers, reflecting a fresh fall in employment within the sector.

Despite the stabilisation in business activity, price pressures remained historically strong, according to survey data. Both input cost and output price inflation rates weakened slightly compared to July but were still notable.