Downturn in Egypt’s non-oil private sector business remains mild in August
Updated 9/5/2023 7:37:00 AM
Arab Finance: The decline in Egypt's non-oil private sector business remains soft in August, with companies continuing to report some indicators of a market recovery, according to the S&P Global Egypt Purchasing Managers’ Index™’s (PMI™) survey posted on September 4th.
The headline seasonally adjusted S&P Global Egypt PMI recorded 49.2 points in August, which is the same reading as in July, reaching its joint-highest level in two years.
The index is still below the 50-point threshold that separates expansion from contraction.
"The Egypt PMI continued to hover close to the 50.0 neutral thresholds in August. The 49.2 reading was the joint-highest in two years alongside July's figure, as output and new orders fell at modest rates while employment and inventories moved into expansion territory,” Senior Economist at S&P Global Market Intelligence David Owen stated.
“The findings suggest that the sector has somewhat stabilized in recent months after a prolonged period of contraction,” Owen added.
In August, output decreased somewhat but at a significant rate as firms indicated that tighter price constraints had forced them to limit capacity.
Also, input cost inflation accelerated to a five-month high, which caused selling prices to increase at a faster pace than they had since the most recent low in July.
Non-oil companies reported that a stronger round of cost inflation had limited output. This was due to poor exchange rates, problems with the availability of raw materials, and wage pressures, resulting in a surge in business expenses for five months.
“Only 9% of respondents were positive that output will grow over the coming year, while many still feared recessionary conditions,” the survey reads.
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