Egypt: PMI rises to eight-month high in October; conditions still deteriorate sharply
November 3, 2022
The S&P Global Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, inched up to an eight-month high of 47.7 in October, increasing marginally from September’s 47.6. Despite the uptick, the index remained below the 50.0 no-change threshold, where it has been mired for the past 23 months. The reading signaled a continued stark deterioration in private sector operating conditions from the previous month.
October’s slight improvement came chiefly on the back of sales contracting at the softest pace in eight months. Elevated price pressures dampened client spending both domestically and abroad, weighing on new orders. This, coupled with the import controls introduced at the outset of the Russia-Ukraine war to preserve foreign reserves, contributed to another decline in output; firms have struggled to acquire certain production materials. Concerning prices, input cost inflation receded for a third consecutive month, although it remained elevated. Output prices continued to increase as well. Lastly, firms’ confidence with regard to the coming 12-month period slid to a record low in October due to concerns over rising price pressures, weak global demand and supply issues. Firms laid off staff for the first time in four months.
Author: Marta Casanovas, Economist