Egypt: Operating conditions in the non-oil private sector deteriorate in September
October 3, 2018
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell to 48.7 in September from 50.5 in August, coming below the 50-threshold that separates contraction from expansion in the non-oil private sector and hitting the lowest since December 2017. This disappointing result comes after operating conditions improved in both July and August, which was the first time that conditions had improved for two months running since September 2015.
Businesses reported a decrease in new business for the first time in three months in September. On the back of weak underlying demand, output also declined. On the employment front, job growth was stagnant in September, which came after record growth in August. And in terms of purchasing activity, this was muted in September, and inventory levels declined at a modest pace.
Price pressures remained a consideration for businesses in September, as higher input costs, reflecting rises in salaries and purchase costs, led to input cost inflation. Firms reported that higher fuel and gas prices were reasons for increased purchase costs. Despite this, input cost inflation moderated to below the historical average in September. Output inflation also moderated.
Looking ahead, businesses remained optimistic for the coming 12 months in September, improving from August.
Author: Edward Gardner, Economist