Kazakhstan's Industry Under Pressure

Kazakhstan’s industrial sector came under significant pressure in March. According to the latest PMI data from S&P Global and Freedom Holding, conditions in the manufacturing sector deteriorated noticeably—more sharply than in the past four years.

The Purchasing Managers’ Index (PMI) fell to 47.4 points, remaining below the 50-point growth threshold for the third consecutive month. The decline in production, which accelerated further in March, had a particularly significant impact. Many companies responded to weaker order intake and financial constraints by scaling back their operations.

New orders also continued to decline, albeit at a slower pace than in the previous month. This suggests that while demand remains weak, it may be stabilizing.

The weaker capacity utilization has now also left a clear mark on the labor market. Manufacturers reduced their workforces at a rate not seen in over two years—a clear signal of the ongoing pressure in the sector.

At the same time, companies are reporting cautious optimism: some see early signs that demand could recover as the year progresses.

There is a ray of hope on the price front. Following sharp increases at the start of the year, inflationary pressure has recently eased, even though the effects of the VAT increase are still being felt. Supply chains, however, remain a burden. Poor weather conditions and geopolitical tensions have once again lengthened delivery times and are making planning difficult for many companies.

Overall, the picture is mixed: The industry is clearly in a slump at the moment, but initial signs of stabilization are fueling hopes for a cautious recovery in the coming months.