Egypt: PMI drops to five-month low in October; conditions continue to worsen
November 3, 2021
The IHS Markit Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—inched down to a five-month low of 48.7 in October from September’s 48.9. Consequently, the index dropped further below the 50-threshold, where it has been for the past 11 months, and signaled a quicker overall deterioration of business operating conditions compared to the previous month.
October’s slide was largely due to output dropping at the quickest rate since April, amid supply bottlenecks. Moreover, new orders dopped marginally, weighed on by falling export orders. That said, overall demand was strong and sales continued to improve, prompting an increase in employment levels. Turning to prices, input cost inflation rose to an over three-year high, which in turn led to a sharp increase in output prices. Higher output prices dampened demand somewhat in some sectors. Lastly, worsening supply chain disruptions and the risk of high inflation weighed on demand, dragging on firms’ optimism as confidence recorded its largest-ever monthly drop.
Author: Marta Casanovas , Junior Economist