Cityscape in Egypt

Egypt PMI March 2023

Egypt: Non-oil private sector conditions deteriorate at a steeper rate in March

The S&P Global Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, dropped to 46.7 in March, down from February’s 46.9. As such, the index moved further below the 50.0 no-change threshold, where it has been mired since November 2020. The reading signaled a steeper deterioration in private sector operating conditions from the previous month.

March’s downtick was chiefly due to a sharp contraction in new orders as steep inflationary pressures dampened client demand. This, coupled with difficulty securing key inputs due to import controls and currency restrictions, led to a marked fall in output levels. These developments prompted firms to cut employment levels for the fourth consecutive month in March. More positively, the services economy experienced the first improvement in activity since August 2021.

Turning to prices, the continued weakening of the Egyptian pound against the U.S. dollar led to a higher import bill. Output prices rose in March, but at the softest rate in five months. This softer increase was linked to firms’ efforts to support demand. Lastly, firms’ sentiment increased to a three-month high in March. However, sentiment was still among the weakest in the series’ history, which started in early 2012.

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