Cityscape in Egypt

Egypt PMI October 2023

Egypt: PMI falls in October

The S&P Global Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, came in at 47.9 in October, down from September’s 48.7. October’s result marked the worst performance since May. Consequently, the index fell further below the 50.0 no-change threshold—where it has been since December 2020—and signaled a sharper deterioration in non-oil private-sector operating conditions compared to the previous month.

October’s downturn reflected steeper contractions in new orders due to elevated price pressures, supply constraints and currency weakness weighing on demand. More positively, output fell at a slower pace, although elevated inflation and material shortages continued to hamper production; the manufacturing, construction and wholesale, and retail sectors registered the largest contractions. Consequently, employment levels decreased at the quickest pace in eight months, and inventories were cut for the first time. Similarly, import challenges drove an increase in delivery times.

While price pressures remained elevated on supply shortages and rising input costs—largely due to a weak Egyptian pound against the U.S. dollar—costs increased at a slower rate than in September. Output charges rose at the slowest rate since July. Thus, expectations for the year ahead hit their most optimistic level so far this year as firms became more upbeat regarding a recovery in economic conditions in the coming year.

David Owen, senior economist at S&P Global Market Intelligence, commented:

“Despite sliding from the levels seen in the third quarter of the year, the PMI remained above the readings taken at the start of the year when inflationary pressures on companies were even steeper. While cost pressures are still sharp, they have moderated somewhat over the course of 2023, providing some respite to firms.”

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