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Karachi, 2 June 2026: HBL’s Manufacturing PMI, compiled by S&P Global, rose to 50.9 in May 2026 from 49.9 in April. As a result, manufacturing activity returned to growth.
However, the improvement looks fragile. Underlying trends still point to stagflation pressures. In addition, ongoing US–Iran tensions continue to weigh on sentiment.
New orders grew again, but only slightly and remained below the long-term average. Meanwhile, export orders jumped at their fastest pace since February 2025, supported by stronger global confidence. However, production stayed almost flat because rising input costs and supplier delays offset demand gains.
At the same time, the labor market weakened further. Employment fell for a second straight month as demand stayed soft. Moreover, input purchasing dropped to its lowest level since October 2025. Manufacturers reduced buying and drew down inventories instead of purchasing expensive raw materials.
Commenting on the data, HBL Head of Equities & Research Humaira Qamar said business confidence on future output fell for the sixth consecutive month and hit a record low. She added that inflation and high raw material costs remain key risks. Therefore, she warned that recent stabilization may not last in a volatile environment.
Furthermore, she noted that monetary policy uncertainty is increasing. Since the State Bank of Pakistan has already tightened policy, future interest rate moves will depend on developments in the Middle East.
Finally, analysts noted that delays in GDP data limit timely decision-making. While GDP remains important, it arrives late. In contrast, PMI provides faster and more practical insight into economic trends.
