Egypt’s non-oil business conditions weaken in September; PMI dips below 50

Updated 10/4/2024 6:49:00 PM

Arab Finance: Egypt’s non-oil private sector saw a renewed downturn in business conditions in September, as rising price pressures curbed sales and slowed activity, according to the latest report of S&P Global Egypt Purchasing Managers’ Index (PMI).

The headline index dipped to 48.8, down from August’s brief expansion of 50.4, marking the sharpest decline since April.

Both output and new orders contracted at significant rates, reversing August’s growth in business activity, the first in three years.

Survey participants attributed the downturn to weaker domestic demand, with new business falling at the fastest rate in five months, compounded by inflation and challenging economic conditions.

In contrast, new orders from abroad showed continued strength, rising for the fifth consecutive month.

Despite this decline, there were improvements in employment and purchasing activity, signaling that some businesses remain hopeful of an economic recovery.

Employment increased for the third consecutive month, particularly in the construction and wholesale and retail sectors, while purchasing activity maintained the same level of growth as in August.

However, delivery times lengthened, causing some delays in inputs.

Inflationary pressures weighed heavily on businesses in September, as input prices surged at their fastest pace since March.

Firms faced higher costs for raw materials, driven in part by currency weakness, leading to increased selling prices, though the rate of price hikes slowed compared to August.

Looking ahead, business confidence remained positive, but optimism about the 12-month outlook dipped to a three-month low, reflecting uncertainty in the face of ongoing economic challenges.