Optimism for the non-oil private sector witnessed a decline to 52.1 from December's 55.1, but still above November 2023’s record low of 50.9
Non-oil private business activity continues to contract for the 38th consecutive month in January 2024, pushed by falling sales volumes and rising price pressures, according to the latest S&P Global Egypt Purchasing Managers’ Index™ (PMI) report.
S&P Global’s PMI for Egypt saw a slight decline to 48.1 in January, compared to 48.5 in December 2023, remaining below the 50 mark that indicates growth in activity.
Optimism for the non-oil private sector witnessed a decline to 52.1 from December's 55.1, but still above November 2023’s record low of 50.9.
The report noted that selling price inflation accelerated to the fastest level in a year as companies looked to pass on higher input prices which weakened new orders.
Input costs and output charges also jumped at their steepest rates in the past 12 months, pressured by accelerated increases in purchasing costs. Companies surveyed also noted a connection between increased prices and Egypt’s ongoing import challenges and a weakened currency, leading to hiked prices of wood, iron, and fuel.
Egypt’s new orders index dropped to 46.4 from 46.9 in December, with the output subindex slowing down to 46.6 from 46.7. S&P wrote that the fall in new business has upped concerns that weak economic conditions will continue in 2024.
“Some firms signaled that the Israel-Gaza conflict and associated geopolitical tensions had a negative impact on tourism activity, which could lead to further headwinds for the non-oil economy over the next few months,” explained Economist at S&P Global Market Intelligence, David Owen.
