Pakistan’s manufacturing sector continued its expansion in February 2026, though at a slightly slower pace, with the headline HBL Pakistan Manufacturing PMI registering 51.8, down from 52.5 in January.
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A reading above 50.0 indicates industry expansion. The February figure marks the sixth consecutive month of growth in the sector, signaling sustained recovery, albeit with some emerging headwinds.
Key Findings from the February 2026 PMI Survey:
- Softer Demand Growth: The primary factor for the moderation was a deceleration in new order inflows. While new business continued to rise, the rate of growth was the softest in the current six-month expansion sequence.
- Stable Output & Employment: Despite slower new orders, manufacturing output continued to rise, and firms maintained a steady level of employment.
- Input Cost Pressures: Manufacturers reported a sharp increase in input costs, driven by higher prices for raw materials. However, efforts to remain competitive limited the extent to which these costs were passed on to customers, leading to a slight squeeze on profit margins.
- Future Optimism Persists: Business sentiment regarding the 12-month outlook remained strongly positive, supported by expectations of further economic improvement, new export orders, and marketing initiatives.
Sector Analysis & Economic Context:
The data suggests the manufacturing recovery is entering a more mature phase where growth is stabilizing rather than accelerating. The persistence of cost pressures remains a key challenge for factory margins. However, the sustained expansion in output and employment, coupled with strong future confidence, indicates underlying resilience in Pakistan’s industrial sector.
The HBL Pakistan Manufacturing PMI is a composite single-figure indicator based on survey responses from purchasing managers in over 400 industrial companies. It is a critical early signal of changing economic trends in the country’s key industrial sector.
