Karachi: The HBL Pakistan Manufacturing PMI, as compiled by S&P Global, rose to 52.8 in December, up from 52.3 in November. This marks the highest level since February, indicating a solid increase in production and stronger demand, with new orders accelerating at their fastest pace since March. Respondents attribute this growth to business expansion and improved product quality.
For the first time in six months, new export orders experienced growth. Businesses credited this to stronger international demand and enhanced product quality.
Despite the higher output, pressure on capacity remained low, as work backlogs decreased significantly. Employment levels rose for the second straight month, with firms citing increased workloads and extended hours in anticipation of more orders. Input purchases also increased, with manufacturers stockpiling to guard against potential price hikes. As a result, raw material inventories saw their steepest rise since the survey's inception.
Humaira Qamar, Head of Equities & Research at HBL, remarked on the data: "Business confidence is at its highest since July, buoyed by expectations of better economic and inflationary conditions. The State Bank echoed this optimism with a surprise 50bps rate cut, signaling confidence in inflation staying within the 5-7% range and achieving its June 2026 FX reserve target."
The PMI, based on monthly surveys of private sector firms, tracks changes in output, new orders, employment, and inventories. It serves as a leading indicator of economic momentum for investors and analysts, often signaling shifts in the business cycle ahead of official GDP data.