Kazakhstan's industry remains under pressure in May

The business climate in Kazakhstan's manufacturing sector remained tense in May. Companies reported weaker demand, declining production and further job cuts, according to the latest Purchasing Managers' Index (PMI) survey by Freedom Holding and S&P Global. The Purchasing Managers' Index stood at 49.0 points in May, virtually unchanged from 48.9 points in April. A value below 50 signals a decline in business activity. This means that business conditions have deteriorated for the fifth month in a row, albeit only moderately. According to the survey, manufacturers once again recorded a decline in incoming orders, following a brief recovery in April. The companies surveyed cited weaker customer demand and financing restrictions as the main negative factors. Production also continued to fall in May, albeit at a slower rate than in the previous month. At the same time, employment fell again as companies adjusted their personnel capacities to the subdued business development. Although cost pressure remained high, it showed the first signs of easing. Both purchase prices and sales prices continued to rise, although the pace of price increases slowed compared to April. Saltanat Mukhambetaliyeva, Head of Economic Analysis and Research at Freedom Holding, explained: "In May, Kazakhstan's manufacturing sector sent mixed signals. On the one hand, the indices for production and purchasing stocks gradually recovered after the low point in March. On the other hand, backlogs of unfinished orders and inventories of finished goods fell significantly and reached their lowest level in seven years." This could indicate a shift towards a more flexible production model, which is more focused on short-term processes and responds to declining demand and increasing logistical and financial constraints. Despite the current challenges, companies remain fundamentally optimistic about the coming twelve months. "Business expectations improved significantly compared to the previous month and remained in positive territory. This points to a possible recovery, provided that new orders are received and cost pressures continue to ease," said Mukhambetaliyeva. The post Kazakhstan's industry remains under pressure in May appeared first on ostwirtschaft.de.