Kazakhstan’s manufacturing sector continued to expand in February thanks to a “solid rise in new orders” and showed the “strongest confidence since June 2024”, according to the monthly Kazakhstan Manufacturing Purchasing Managers' Index (PMI) survey, compiled by S&P Global and Freedom Holding.

The PMI was recorded at 52.1, above the 50.0 no-change mark and above January’s 51.5, which reflected an expansion in the manufacturing sector that has taken place for three months straight. 

“A solid expansion of new orders meant that the Kazakhstan manufacturing sector remained comfortably inside growth territory during February. Output, employment and purchasing also increased again during the month, while business confidence was the strongest since June last year. Meanwhile, the pace of input cost inflation hit a two-year high and firms increased their output prices at a faster pace accordingly,” the statement accompanying the PMI data said.

Yerlan Abdikarimov, director of the financial analysis department at Freedom Finance Global, commented: "Kazakhstan’s manufacturing sector showed a recovery in growth rates in February after a significant slowdown in January, when the indicator fell sharply from its historical maximum in December (from 53,9 to 51,5). The recovery was driven by steady growth in new orders and increased production volumes. Worrying factors included a sharp acceleration in cost-push inflation, which reached a two-year high due to rising prices for raw materials, transport and utilities, which in turn led to higher selling prices.

“Logistics problems and customs delays affected delivery times, but procurement activity continued to grow. Despite the challenges, as well as the fiscal reforms announced by the Government in January-February of this year, industry representatives raised their one-year forecasts to an eight-month high. In addition to the sector’s confidence in stable demand, this could also be supported by the Government’s decision to stimulate industry diversification through the launch of a large scale program supporting investment projects with the involvement of the country’s development institutions,” he added.

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