HBL PMI: Manufacturing activity hits highest level since war began

The HBL Pakistan Manufacturing Purchasing Managers' Index (PMI) rose to 51.8 in August 2026, marking its highest level since the start of the war. This increase, from 51.7 in July, suggests manufacturing activity is hitting new highs. While the growth rate remained modest, demand conditions are showing positive signs. Strong domestic orders and sustained export demand are boosting the sector.

New orders surged to their fastest pace in five months, driven by better product quality and competitive pricing. Export orders also grew for a fourth month in a row, showing external demand resilience. This positive order environment helped manufacturing activity grow at a similar pace to July. However, manufacturers are cautious about rapid production scaling due to ongoing inflation.

They kept increasing purchases and inventory levels, anticipating stronger demand. Employment levels stayed relatively stable, with selective hiring to meet higher order volumes balanced by cost-cutting measures. Supply chains improved, with delivery delays dropping to their lowest level since November 2025. Humaira Qamar, Head of Equities & Research at HBL, remarked that business confidence for the next 12 months improved significantly in August.

This optimism was fueled by expectations of continued sales growth and reduced price pressures. While inflation is expected to ease in the second half of FY27, the disinflationary trend may be slower and less significant than initially predicted.