Pakistan's manufacturing sector's February employment growth hits a record high

Investing.com – According to the S&P Global-compiled Pakistan Manufacturing PMI data, Pakistan’s manufacturing sector expanded at its fastest pace in a year in February, with employment growth reaching the highest level since data collection began in May 2024.

The seasonally adjusted PMI rose from 51.8 in January to 53.6 in February, remaining above the 50.0 growth threshold for the fourth consecutive month.

This reading indicates a solid improvement in the sector’s health, driven mainly by accelerated output and new orders growth.

New orders expanded for the fourth month in a row, with the fastest growth in 11 months. Manufacturers attributed the sales increase to improved quality and enhanced price competitiveness.

New export sales recovered, with growth reaching the highest level in nearly a year amid improving international demand.

Output levels increased for the fourth consecutive month in February, with the fastest growth since November last year. Some companies used expanded capacity to rebuild finished goods inventories, leading to the third increase in inventories over the past four months.

Pakistani manufacturers expanded their workforce at a steady pace in February, marking the most significant employment growth since the series began.

Despite record employment growth, companies prioritized completing existing work rather than starting new projects, resulting in a substantial reduction in backlogs.

Operating costs rose sharply in February, with cost inflation accelerating to the fastest pace since January 2025. Respondents generally attributed rising costs to higher raw material prices.

Manufacturers raised selling prices strongly, with charge inflation accelerating to the highest level in 18 months as companies sought to protect profit margins.

Input purchases increased for the fourth consecutive month since November 2025, with the fastest accumulation since October 2024. As firms stockpiled additional inputs to meet demand, procurement inventories also rose slightly.

Delivery delays were widespread in February, worsened by rising fuel and transportation costs affecting suppliers.

Businesses expressed confidence in future output in February, hopeful about sustained growth in domestic and international demand and further improvements in product quality.

Optimism fell to the lowest level in 22 months, with companies concerned about the long-term impact of tariffs and high tax burdens.

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