Confidence in activity growth was up from a record-low in November despite activity shrinking for the 37th month - an index of below 50 is considered a contraction - to hit 55.1 from November's 50.9
Egypt’s non-oil private sector activity shrank in December 2023, as import constraints, slowed demand, and the weakened EGP continued to impact businesses.
The S&P Global Purchasing Managers' Index (PMI) for Egypt was up to 48.5 from November’s 48.4, noting a modest deterioration that was softer than the average seen over the past year (47.9).
It is important to note that Egypt received its highest index rating of 49.2 in July, breaking its previous record from August 2021.
“…As highlighted by surveyed firms, inflationary pressures are still widely driven by the economic challenges originating from the Russia-Ukraine war, including a marked depreciation of the pound against the US dollar leading to an uplift in buying costs,” explained David Owen, Senior Economist at S&P Global Market Intelligence.
Confidence in activity growth was up from a record-low in November despite activity shrinking for the 37th month - an index of below 50 is considered a contraction - to hit 55.1 from November's 50.9.
“Renewed growth in labor markets came alongside an improvement in business expectations, as a greater proportion of firms hoped for a rise in activity and the easing of economic challenges. The degree of optimism was much higher than the series-record low in November, and the second-best in 2023,” explained S&P in their report.
The PMI report attributed increased employment numbers as a main contributor to raising December’s PMI, which was partially a reaction to growing business in the past 5 months and to maintain backlogs of work during the final month of the year.
Non-oil companies recruited fresh blood for the first time in 3 months, with S&P noting that future output expectations staged a modest recovery from November's record low.
New order volumes decreased at the sharpest rate since May, driven by the foreign currency shortage and high inflation. The subindex for new orders slid to 46.9 from 47.3 in November, with the wholesale and retail sectors being hit the most.
Output was cut in December to 46.7 from 47.2 as climbing prices affected demand, however, “the reduction was one of the slowest seen in the past two years.”
Egypt's headline inflation slowed to an annual 34.6% in November but remained near September's all-time high of 38.0%, according to the state statistics agency CAPMAS.
