The imposition of a state of emergency in Kazakhstan in early January amid civil unrest has hit the Central Asian country’s manufacturing sector, according to the latest Purchasing Managers’ Index survey data ( PMI) from Tengri Partners and IHS Markit.
The index posted 43.8 in January, down from 48.9 recorded in December, according to the PMI survey report released on February 1. Any number below 50.0 represents deterioration.
Anuar Ushbayev, Managing Partner and Chief Investment Officer at Tengri Partners, said: “The state of emergency in the first half of January clearly had a significant impact on manufacturers’ ability to operate and led to a particularly difficult month. in terms of securing new orders from customers, being able to maintain production and securing materials from suppliers.”
“With the end of the state of emergency, companies are hoping for improved conditions in February and beyond. With this in mind, confidence around the production outlook has reached a seven-month high,” he said. he adds.
Business closures, restrictions on the sale of certain items and restrictions on the movement of people are all leading to sharp cuts in production and new orders. New orders fell at the fastest rate in 21 months as material shortages added to the disruption caused by the state of emergency, with production also down the biggest extent since April 2020, according to the report. ‘investigation.
Employment levels have shrunk at the fastest pace since the manufacturing PMI survey began in March 2019. The state of emergency, with some workers on unpaid leave and others leaving for better jobs paid elsewhere led to a record reduction in the workforce in January. About one in five respondents said their workforce decreased during the month, Tengri and IHS Markit noted.
The inflation rate for intermediate consumption costs slowed to its lowest level in 22 months, but companies continued to raise their own selling prices at the same pace as in December.
Despite the difficulties faced by companies in January, respondents were generally optimistic about increased production in the coming year. In fact, sentiment was the highest since June of last year. That said, a number of manufacturers pointed to the difficulty of making predictions at present, the survey report adds.