Cityscape in Egypt

Egypt PMI December 2021

Egypt: PMI increases to four-month high in December; conditions still deteriorate

The IHS Markit Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—inched up to a four-month high of 49.0 in December from November’s 48.7. Consequently, the index remained below the 50-threshold, where it has been for the past 13 months, signaling a continued but milder deterioration in business operating conditions from the previous month.

December’s upturn was largely due to both output and new orders declining at the softest pace in three months. Still, demand remained weak, partly due to mounting selling prices. That said, an improvement in tourism numbers supported new business, and export sales expanded at the quickest rate since February. Turning to prices, input costs remained elevated, prompting firms to increase selling charges. Moreover, employment levels decreased in December, although the job reduction rate moderated. Lastly, business confidence ticked up marginally in December, but remained subdued nonetheless, weighed on by concerns over the Omicron variant and the uncertain impact of high prices.

David Owen, economist at IHS Markit, noted:

“The latest Egypt PMI gave increased confidence that inflationary pressures peaked earlier in the fourth quarter and are now beginning to soften. […] Firms highlighted a weaker impact from raw material costs as step-downs in global commodity prices helped suppliers to adjust their own fees.”

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