Egypt’s non-oil private sector contracted for a sixth straight month in August, as weak demand continued to weigh on business activity, S&P Global reported on Wednesday.
The S&P Global Egypt Purchasing Managers’ Index (PMI) fell to 49.2 in August from 49.5 in July, remaining below the 50.0 threshold that separates growth from contraction.
This reflects a modest deterioration in operating conditions, though the rate of contraction was softer than the long-term average of 48.2, according to Reuters.
Activity and new orders declined across all monitored sectors, driven by soft customer demand and persistent inflation.
While output and new order declines accelerated slightly from July, they remained slower than historical averages.
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Despite the downturn, employment increased for a second month following nine months of stagnation.
Firms added staff to boost capacity and address backlogs, though overall workforce growth was marginal.
Input cost inflation fell to its slowest rate since March, reaching a near four-and-a-half-year low.
This, combined with a faster rise in selling prices, helped companies narrow the gap between input and output price inflation.
David Owen, senior economist at S&P Global Market Intelligence, noted that “persistent inflationary pressures appear to be a key factor holding back company sales and output projections.”
He added that the easing of business cost pressures could eventually spark a recovery in client demand if passed on as lower prices.
Overall, Egyptian non-oil firms remained cautious, with purchasing volumes and input stock levels continuing to decline.
Confidence in the year-ahead outlook remained weak, unchanged from July and only slightly above June’s record low.
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Image Credit: Reuters
