ISLAMABAD: Pakistan’s manufacturing sector has maintained its expansionary momentum, with the HBL Pakistan Manufacturing Purchasing Managers Index reaching its highest level in August, according to sources in the country’s finance ministry on Wednesday.
Pakistan's August reading of 51.8, up from July's 51.7, is the highest PMI level since March and signals continued, albeit modest, expansion in manufacturing activity.
The HBL Pakistan Manufacturing PMI is a monthly economic indicator, jointly developed by HBL and S&P Global, that measures the overall health, activity trends, and direction of Pakistan's manufacturing sector.
Demand strengthens
According to the finance ministry’s assessment, the improvement is supported by stronger demand conditions, with new orders increasing at their fastest pace in five months.
“The rise in orders reflects improved product quality and manufacturers’ efforts to remain competitive on pricing,” sources added.
“Export orders also expand for the fourth consecutive month, indicating sustained external demand for Pakistani manufactured goods.”
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Stronger order flow helps sustain production growth, although manufacturers remain cautious about significantly increasing output amid continuing cost pressures.
Purchasing activity rises
Finance ministry officials said that manufacturers increased purchasing activity for the third consecutive month and continue building inventories in anticipation of stronger demand.
Employment, however, remains broadly unchanged as firms balance selective hiring against cost-management measures.
Supply-chain conditions also improved during the month, with delivery delays easing to their lowest level since November 2025.
Cost pressures ease
The latest PMI data points to some moderation in inflationary pressures facing manufacturers.
Input-cost inflation has eased to its lowest level of 2026, providing some relief to businesses. The improvement comes as manufacturers continue to navigate elevated operating costs and uncertain external conditions.
Business confidence has also strengthened, with firms becoming more optimistic about output over the next 12 months.
Outlook improves
The finance ministry’s latest economic update comes as the government seeks to consolidate macroeconomic stability while supporting private-sector investment, exports and productive activity. The ministry said that greater financial-sector capacity is being directed toward productive investment, enterprise creation and exports.
HBL Head of Equities and Research Humaira Qamar says business confidence has reached one of its highest levels this year, supported by expectations of sustained sales growth and moderating price pressures. She cautions, however, that the disinflationary process is likely to be gradual during the second half of FY27.
The August PMI therefore points to a manufacturing sector gaining traction through stronger domestic and export demand, expanding production, improving supply conditions and rising confidence, while firms remain cautious over costs and future inflation.