Egypt: PMI falls in September; conditions continue to deteriorate
The IHS Markit Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—dropped to a four-month low of 48.9 in September from August’s 49.8. As such, the index fell further below the 50-threshold for the tenth consecutive month, signaling a quicker overall deterioration of business operating conditions compared to the previous month.
September’s deterioration came amid weak economic conditions and a downtick in demand, leading to a marginal decline in both output and new orders. Moreover, exports dropped sharply in September, and for the first time in six months. More positively, firms’ optimism regarding activity in the year ahead climbed to the highest level recorded in the series history. Sentiment was supported by the quickening vaccination drive and the easing of traveling restrictions, which should support the tourism industry. Additionally, thanks to heightened optimism, firms increased staff levels in September for the third month running. Turning to prices, input costs increased again, with the inflation rate clocking in at a near three-year high in September and only some first passed rising costs to clients.