Cairo – Mubasher: Egypt’s headline seasonally adjusted Purchasing Managers’ Index (PMI) increased to 49.1 in June 2023 from 47.8 in May, marking its highest level since August 2021.
The Arab Republic’s non-oil private sector economy remained under pressure at the end of the second quarter (Q2) of 2023, as the PMI once again reflected a deterioration in business conditions.
According to the latest S&P Global PMI data, both output and new orders retreated at weaker rates, pushing the headline index up to a 22-month high to signal only a marginal decline since May 2023.
The inflationary pressures eased slightly and remained much softer than the peaks seen in January. However, the level of employment dipped for a seventh consecutive month in June amid subdued confidence toward the 12-month outlook.
In spite of positive directional movements in a number of sub-indices, business confidence fell to its second-lowest level on record, which showed a somber mood amongst businesses across Egypt's non-oil private economy.
Non-oil private sector firms in Egypt lowered their purchasing activity as well as their stocks of inputs. Meanwhile, the survey data on prices underlined a further moderation of inflation across Egypt's non-oil private sector.
Overall input cost inflation eased to a 16-month low, driven by a slower uptick in purchase costs
Joe Hayes, Principal Economist at S&P Global Market Intelligence, commented: "The Egypt PMI retained its upward momentum in June, rising closer to the critical 50.0 threshold that marks stabilisation. At 49.1, the index reached its highest level for almost two years.”
"Behind June's sustained uplift in the PMI were output and new orders, which similarly showed rates of decline softening amid reports from some survey members that demand conditions were beginning to show green shoots of recovery,” Hayes added.
He indicated: "An easing of inflationary pressures will also be welcomed. After the steep price increases seen at the start of the year, fewer companies are reporting such high-cost pressures.”
“If key survey indicators such as output and new orders can sustain their upward current trajectory, we may see an improvement in business sentiment in the coming months,” the economist concluded.
