The latest data from the S&P Global Egypt Purchasing Managers’ Index (PMI) sub-components painted a mixed picture, with only the output and new orders indices keeping the headline measure below the neutral mark
Egypt’s non-oil private sector showed continued signs of contraction as the final quarter of 2024 began, with business activity remaining below the neutral threshold for the second consecutive month, hitting 49.0 in October, marginally up from September's reading of 48.8, but still below the 50.0 mark that signals expansion.
The latest data from the S&P Global Egypt Purchasing Managers’ Index (PMI) sub-components painted a mixed picture, with only the output and new orders indices keeping the headline measure below the neutral mark.
David Owen, Senior Economist at S&P Global Market Intelligence, commented on the situation, saying, “With the PMI at 49.0 in October, Egypt's non-oil economy is not too far from growing again, and a lessening of cost pressures in the latest month provides some hope that economic headwinds could ease.”
The sector’s outlook remains uncertain, with firms showing low confidence in the future as business activity expectations for the next 12 months dropped to one of its lowest levels in the survey's history.
The survey also pointed to ongoing inflationary pressures, particularly in input costs, while the increase in selling prices, driven by higher raw material and utility costs, was reported to be sharper than usual.
Firms noted that the strong value of the USD had exacerbated import costs, further impacting business. “Selling prices were mainly raised due to another sharp uptick in the cost of inputs such as raw materials and utilities, which in turn often arose due to the impact of a strong US dollar value on import prices,” the report explained.
Total input purchases fell for the first time in three months, which eased pressure on supply chains. Supplier delivery times lengthened for a third successive month in October and at the softest pace in the current period.
Employment levels continued to rise for the fourth consecutive month, with firms expanding their workforce at the fastest pace since May.
Businesses also continued to build inventory stocks, likely to hedge against further cost increases and supply chain disruptions, however, data also showed that input purchases fell for the first time in three months, easing some strain on supply chains.
Sector-wise, the downturn was most pronounced in the construction industry, where activity and sales contracted at significant rates, though the broader non-oil private sector was affected across the board.
