HBL manufacturing PMI edges down to a six-month low
The seasonally adjusted HBL Pakistan Manufacturing Purchasing Managers’ Index, compiled by S&P Global, edged down to 50.8 in October from 50.9 in September. The reading remains above the 50.0 mark that separates growth from contraction, but points to only a marginal improvement in operating conditions. At the same time, underlying indicators point to higher inflationary risks, as a sharp increase…
The latest Purchasing Managers' Index (PMI) for Pakistan's manufacturing sector dipped to 50.8 in October, down from 50.9 in September, according to data from S&P Global. The figure remains above the critical 50.0 threshold that separates expansion from contraction, indicating a slight improvement in the sector's operating conditions. However, the underlying data suggests heightened inflationary pressures, as rising input costs, particularly fuel and fabric prices, curtailed production activity.
Higher input prices led to a marked increase in selling prices, the steepest rise since April. This trend underscores the mounting challenges confronting the manufacturing industry amidst surging energy costs and persistent disruptions in the Middle East. Notably, new orders began to rise in October, buoyed by enhancements in product quality and a resurgence in domestic demand.
Conversely, export orders contracted for the first time in six months, marking their steepest decline in over a year, as heightened prices and regional impediments dampened overseas demand. Employment levels also fell for the first time since May, as companies sought to mitigate costs in the face of intensifying input-price pressures.
Humaira Qamar, Head of Equities & Research at HBL, remarked on the latest PMI data, stating that business confidence plummeted to a three-month low due to inflation concerns and higher raw material costs weighing on demand expectations. The sharp surge in price pressures raises apprehensions about potential second-round inflationary impacts.
In response, the State Bank of Pakistan (SBP) implemented a measured 50 basis points rate hike to 12.0%, reflecting a prudent strategy to balance the recovery in economic activity against lingering inflationary and geopolitical risks. Looking ahead, monetary policy is expected to remain data-dependent, with forthcoming inflation readings serving as a key gauge of the future policy path.
Written by urgent.news from Business Recorder's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
