Egypt: PMI hits highest reading since February in August; conditions still deteriorate
The S&P Global Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, came in at a six-month high of 47.6 in August, up from July’s 46.4. As such, the index moved closer to—but remained below—the 50.0 no-change threshold, where it has been mired for the past 21 months. This signaled a softer deterioration in private sector business conditions compared to the previous month.
The softer worsening of conditions in August was chiefly due to more moderate contractions in both output and new orders. The declines were due to a continued deterioration in client demand amid spiking inflation. Additionally, output was constrained by a lack of raw materials, import regulations and the war in Ukraine. Moreover, new export orders also contracted amid a global economic slowdown. Lastly, firms’ sentiment was the second-lowest on record, weighed on by weak market conditions, elevated inflation and ongoing supply issues. More positively, businesses onboarded staff at the quickest pace in nearly two years. Regarding prices, input costs rose at a more moderate pace in August, resulting in slower increases in output prices.