Egypt: PMI falls in March; conditions deteriorate at quicker pace
April 5, 2022
The S&P Global Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—fell to a 21-month low of 46.5, down from February’s 48.1. Consequently, the index dropped further below the 50-threshold—where it has remained for the past 16 months—revealing a quicker deterioration in business conditions compared to the prior month.
March’s deterioration was due to output, new orders and stocks of purchases declining sharply—at the quickest rates since the outbreak of Covid-19. The downturn was brought about by supply worries, which further elevated prices—especially for energy, fuel, food and raw materials—and dragged on demand in turn. Additionally, the 21 March weakening of the Egyptian pound by the Central Bank led to higher import costs. Firms’ sentiment plunged to their lowest levels in the series’ history in March, weighed on by a downbeat growth outlook due to the war in Ukraine. Consequently, businesses cut staffing levels for the fifth month running.
Author: Marta Casanovas , Economist