Cityscape in Egypt

Egypt PMI September 2023

Egypt: PMI deteriorates in September

The S&P Global Purchasing Managers’ index (PMI), which measures business activity in the non-oil private sector, fell to a four-month low of 48.7 in September from August’s 49.2. As a result, the index dipped further below the 50.0 no-change threshold, where it has been since December 2020. The reading signaled a sharper deterioration in private-sector operating conditions compared to the previous month.

September’s downturn chiefly reflected steeper contractions in both new orders and output. This was due to downbeat customer demand, pressured by elevated inflation. The difficulty of acquiring raw materials due to import challenges and elevated prices further restrained production. Consequently, backlogs rose at the steepest rate in the survey’s history, which started in 2011. More positively, firms onboarded staff in September, with the job creation rate accelerating to an over five-year high.

Turning to prices, input cost inflation remained significant due to a weak Egyptian pound against the U.S. dollar and higher wages—which were increased in a bid to shield employees from high living costs. Consequently, output charges also rose. Lastly, firms were only marginally optimistic regarding output expectations in the coming 12 months amid concerns over price stability.

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