Pakistan Joins Global Standards with the Launch of Its First Manufacturing PMI
Islamabad witnessed a significant economic milestone with the launch of Pakistan’s first Manufacturing Purchasing Managers’ Index (PMI), a joint initiative by HBL and S&P Global. The event took place at Serena Hotel on February 14, 2025, bringing together industry leaders, policymakers, and investors.
What is the Manufacturing PMI?
The Manufacturing PMI is a globally recognized economic indicator that assesses the health of the manufacturing sector. It provides data on business conditions, including output, new orders, employment, inventories & supplier delivery times. The index helps businesses, investors, and policymakers understand market trends and make informed decisions.
The PMI will be a monthly report, offering insights into Pakistan’s manufacturing performance. It aims to track industry trends, identify economic challenges, and guide businesses in improving productivity. Investors—both local and international—will benefit from this data-driven approach, which will help them evaluate economic conditions before making financial commitments.
S&P Global, a leading US-based financial analytics firm, has over 10 years of experience in PMI analysis. The same tools and techniques utlised globally will be implemented for Pakistan, ensuring global standards in economic assessment.
Key Stakeholders and the relevance PMI
The PMI launch has been well received by domestic businesses, policymakers, and investors. These stakeholders will use the index to monitor economic activity and adjust their strategies accordingly. It is expected to provide a much-needed standardized economic metric for Pakistan, which has lacked real-time data for the manufacturing sector. Typical indicators such as LSM & GDP lag by a time period of 2 months or more. “The core advantage of the PMI is that it provides real-time & more forward looking data to assess the health of the manufacturing sector. The sample structure is selected to accurately represent the structure of the economy. Globally, the PMI output index is strongly correlated with actual production levels.
The CEO of HBL assured the audience that with modern tools, data-driven insights, and S&P Global’s decade-long experience, this initiative will bring positive change. He emphasized that the Manufacturing PMI will serve as a reliable economic indicator, helping industries and policymakers make informed decisions.
Humaira Qamar Head of Equities & Research at HBL remarked “With a sharp reduction in the policy rate and lackluster GDP growth of 0.9% in the first quarter of the fiscal year 2025, stakeholders are eagerly seeking signs of a pick-up in economic activity.
Our inaugural PMI release shows progress on this metric, with the headline index recorded at 55.4 in Jan’25, well above the previous 6M average, signaling a robust recovery in business conditions. New order & output indices posted their highest readings since data collection began. These sub-indices have a cumulative 55% weight in the headline index. New business was supported by a strong expansion in new export orders.
Upon reviewing the data, we are confident that the manufacturing sector in Pakistan is well positioned for an upturn. In our view, the upside from resilient demand currently outweighs the potential downside risks stemming from political instability and global commodity price shocks. The Trump tariffs are viewed as a tailwind as his administration’s policies are broadly bearish for oil (helping lower Pakistan’ import bill) and could bode well for Pakistani exports through a redirection of trade away from the U.S.’s main trade deficit countries (China, Mexico, Canada) and towards smaller countries such as Pakistan.
This launch marks a significant step forward for Pakistan’s economy, aiming to provide clarity, transparency, and strategic direction to its manufacturing sector.
Muhammad Nassir Salim, President & CEO – HBL, stated, “We are pleased to launch the PMI for Pakistan, which will enhance investor confidence and transparency in our economy.
