Kazakhstan’s services sector saw a renewed rise in activity in March following a decline recorded across January and February, according to the business activity reading of the S&P Global Kazakhstan Services Purchasing Managers' Index (PMI).

The reading showed a PMI score of 51.0 in March, up from 48.5 registered in February. Any reading below 50 indicates a contraction.

Despite the increase in business activity, there was no corresponding growth in employment. Job cuts continued for the second consecutive month, with the rate of reduction similar to that seen in February. Additionally, costs increased rapidly and at an accelerated pace in March. However, firms attempted to minimise the impact of these cost increases on their clients, as the rate of output price inflation decreased further and was significantly weaker compared to cost burdens.

Maryam Baluch, an economist at S&P Global Market Intelligence, said: "The Kazakh service sector signalled solid growth in business activity during March, shrugging off the contractions seen in the first two months of the year. Anecdotal evidence pointed to improved demand conditions which helped revive growth in new orders and activity. Additionally, though employment has been falling for the past two months, if demand can be sustained, this allows opportunities for growth in workforce numbers.”

"In terms of inflation, rising labour and material prices pushed cost burdens higher. However, there were some signs that Kazakh service companies refrained from passing the entirety of their costs on to customers, as the rate of charge inflation moderated on the month. Lastly, firms were hopeful that demand conditions will improve and in turn support further expansions in activity in the coming year," she added.