Egypt’s non-oil private sector activity sees downturn in April

Updated 5/3/2023 8:54:00 AM

Arab Finance: Egypt’s non-oil private sector businesses signaled a decline in operating conditions in April at the weakest pace for six months, as inflationary pressures and high demand levels were slightly eased, according to the S&P Global Egypt Purchasing Managers’ Index™’s (PMI™) survey posted on May 3rd.

The latest PMI for the country’s non-oil private sector recorded 47.3 points in April, compared to a previous monthly reading of 46.7 points, but still below the 50-point threshold that separates expansion from contraction.

The PMI’s sub-indices of output and new orders rose to six- and four-month highs, respectively, in April.

Moreover, the survey showed that continued import controls and inflationary pressures weighed on inventories and contributed to a contraction in purchasing activity.

“Relative calmness in currency markets led to reduced pressure on import prices, culminating in the softest rise in purchase costs for a year and one that was weaker than the trend rate,” David Owen, Senior Economist at S&P Global Market Intelligence, said.

However, the report indicated that inflationary pressures were softening from the multi-year highs witnessed towards the end of 2022.

It also showed that output prices eased for the third consecutive month, marking the lowest since August 2022.

With some businesses showing little optimism, firms' sentiments for the year ahead dropped to weakest on record in April as they pointed out that weak domestic and international demand as well as high price levels which imply uncertain future activity.