Employment data in Egypt also fell for the third month in a row, as lower demand resulted in stable backlogs and lower workloads
Kicking off 2022, non-oil companies reported weak business conditions amid declining demand and inflationary pressures in January, with IHS Markit Egypt Purchasing Managers’ Index (PMI) dropping to its lowest reading since April 2021 at 47.9 compared to December’s 49.
Businesses in the construction and wholesale and retail sectors reported the most downturn, where output fell sharply, while the manufacturing and service sectors saw more stable activity in January.
Despite this and other data in the report, IHS Markit economist David Owen stated that “More positively, firms remained largely confident that they would weather the current economic storm and see activity increase over the next 12 months. The degree of optimism picked up but remained lower than those seen through much of 2021."
Employment data in Egypt also fell for the third month in a row, as lower demand resulted in stable backlogs and lower workloads.
“The drop-off in sales volumes was the joint-quickest since June 2020, driven by marked contractions in the construction and wholesale and retail sectors. The passing on of higher input costs also contributed to the latest fall in demand,” the report noted.
Some of the surveyed businesses pointed towards high prices for goods and services as reasons for lower sales, while others complained of pandemic-related supply issues. High shipping costs also made it difficult for some businesses to obtain stocks from vendors.
However, the outlook for future business activity picked up for the second straight month, as overall sentiment continued to rebound from its fall to 12-month low in November.
