Egypt: PMI is unchanged in September; conditions continue to deteriorate
The S&P Global Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, was unchanged at August’s six-month high of 47.6 in September. Consequently, the index remained below the 50.0 no-change threshold, where it has been mired for the past 22 months. The reading signaled a continued deterioration in private sector operating conditions from the previous month.
September’s result was largely due to output declining for the 13th consecutive month. Weak demand—largely amid high prices—material shortages and energy rationing weighed on production. Similarly, exports contracted at the sharpest rate in over two years. With regard to prices, cost inflation rose to a three-month high in September amid intensified price pressures for energy, materials and wages, while the unfavorable exchange rate also contributed to the rise. Consequently, output charges were hiked. More positively, employment levels rose for a third consecutive month and new orders dropped at a more moderate pace in September. Lastly, firms’ sentiment regarding the coming 12-month period improved from August’s near-series low, but remained downbeat nonetheless.