Pakistan’s manufacturing sector showed a small but positive step forward in August. The HBL Pakistan Manufacturing Purchasing Managers’ Index (PMI) rose to 51.8 from 51.7 in July. This is the highest reading since the current regional conflict began. A figure above 50 means the sector is expanding, even if the pace stays modest.
Stronger demand helped push the index higher. New orders grew at their quickest rate in five months. Companies said better product quality and competitive prices attracted more buyers. Domestic orders improved, while export orders rose for the fourth month in a row. This mix of local and overseas demand supported factory output, which grew at a similar pace to July.
Factories responded carefully. They bought more inputs for the third straight month and built up inventories in case demand strengthens further. Employment stayed roughly the same, some firms hired to handle extra work, while others held back due to cost concerns. Supply chains also improved, with delivery delays falling to their lowest level since late 2025.
Business confidence about the next year strengthened and reached one of the highest levels seen in 2026. Managers expect steady sales and some easing in price pressures. Inflation is still a concern, however, and any slowdown in costs is expected to happen gradually.
Overall, the latest PMI points to a continued, careful recovery in manufacturing. Growth remains modest and risks from regional tensions and lingering cost pressures persist. Still, the steady rise in orders and improving supply conditions offer a more encouraging picture for the months ahead.