Cairo – Mubasher: Egypt’s non-oil private sector operation conditions weakened in September amid cooling of inflationary pressures.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) slipped to 48.7 in September from 50.5 in August, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.
“The 48.7 PMI figure for September represents a return to contractionary territory for the non-oil private sector in Egypt, indicating that despite the two months of consecutive 50-plus readings in July and August, there remains some weakness in the recovery,” MENA Economist at Emirates NBD Daniel Richards commented.
“That being said, it remains higher than the average reading since the IMF reform programme began in November 2016 (47.9), and the outlook remains positive,” Richards continued.
Weak client demand, as well as declining new orders, new export sales, during September, weighed on new business activities at Egyptian non-oil private sector companies, the survey showed.
Moreover, the output non-oil private companies reported shrank slightly last month following a broad stabilisation in August, it said.
Employment deteriorated in September after staffing levels hit record highs in August, the survey added, pointing out that “outstanding business rose in the latest survey period, albeit marginally”.
“Firms continued to face higher overall input costs during September, reflecting rises in both salaries and purchase costs. The latter was the predominant reason behind inflationary pressures, with panellists reporting higher fuel and gas prices,” it said.
The input cost inflation rate slashed last month below its historical average from July’s recent high, the survey highlighted, adding that companies raised their output charges during September.
“Where an increase was registered, firms commented on the pass-through of higher cost burdens to clients. That said, the latest rise was modest and the weakest in five months,” according to the survey.
Egypt’s non-oil private sector companies' sentiment towards the 12-month outlook for output improved during September as compared with August, but it remained below the series average.
