In August, the growth of business activity in Kazakhstan's services sector slowed significantly, and the composite private sector index fell below the critical threshold due to a sharp decline in manufacturing, reports infohub.kz.
The Purchasing Managers' Index (PMI) for the services sector stood at 51.9 points, down from 54.1 in July. Although the reading has remained above the 50-point mark for five consecutive months, August data indicate the weakest expansion since the growth phase began.
Service providers note that the market is supported by an inflow of new orders, which has been increasing for six consecutive months. Survey participants attribute this to improved underlying demand, marketing efforts, and the adoption of new business models. According to Saltanat Mukhambetaliyeva, head of economic research and analytics at Freedom Holding Operations LLP, the real estate sector remains the undisputed leader in growth within the services industry.
Despite a steady influx of contracts, companies are reluctant to expand their workforce. Employment in the services sector has been declining for seven consecutive months. Employers explain this trend by business restructuring, sending employees on unpaid leave, and the planned conclusion of contracts. Nearly three-quarters of respondents do not expect any significant changes in business activity over the next year.
On the pricing front, businesses face pressure from rising costs for fuel, energy, and logistics. However, the rates of input cost inflation and output price increases were the lowest in five and three months, respectively. Some service providers chose to absorb part of the increased costs by offering discounts to customers to stimulate sales.
The composite PMI for Kazakhstan, which combines the services sector and manufacturing, fell to 49.3 points in August (from 51.5 in July). A reading below 50 indicates that the four-month period of continuous growth in the private sector economy has come to an end.
The decline was driven by a sharp contrast between the two sectors: moderate expansion in services could not offset a strong drop in production volumes and new orders in the industrial sector. Unlike service companies, industrial enterprises faced a more rapid increase in resource prices and were forced to raise output prices significantly.
In early August 2026, it was reported that the services sector PMI had reached a one-year high in July, standing at 54.1 points. The PMI is calculated on a scale from 0 to 100. A reading above 50 indicates an improvement in economic conditions and growth in activity, while a reading below 50 signals a contraction.