Kazakhstan’s service sector activity fell back into contraction in October following a brief rise in September, according to purchasing managers’ index (PMI) data released by Freedom Holding Corp and S&P Global on November 5.

In October, service providers in Central Asia's largest economy faced challenges due to reduced demand. New business opportunities declined. The slowdown contributed to a renewed drop in overall activity. Nevertheless, employment in services increased for the second consecutive month, though at a slower growth rate than previously seen. Additionally, cost pressures eased, allowing businesses to raise their service charges, albeit at a more moderate pace.

The seasonally adjusted PMI services index for October fell to 49, down from 51.1 in September (any reading above 50.0 indicates an expansion in business activity).

Yerlan Abdikarimov, director of the financial analysis department at Freedom Finance Global, commented: “In October, activity in Kazakhstan's service sector declined again, driven by a reduction in new orders amid high competition and declining customer activity. Nevertheless, the sector showed expansion in the labour market, recording employment growth for the second consecutive month, albeit at a somewhat slower pace that lagged behind industrial enterprises.”

“The continued easing of cost inflation pressures has restrained the rate of price growth among service providers, reaching its lowest level in the past four years. Despite these challenges, market participants remain optimistic about the future, expecting new contracts and investment opportunities to boost activity over the next twelve months," he added.