Cairo – Mubasher: The headline seasonally adjusted Purchasing Managers’ Index (PMI) of Egypt rose to 48.5 in December 2023 from 48.4 last November, according to the latest S&P Global PMI data.
The index highlighted a modest deterioration in the health of the non-oil sector, which was softer than the average seen over the past year of 47.9.
Meanwhile, the weakness in the Egyptian pound and ongoing supply shortages affected the downturn, as firms subsequently faced both rapid input cost inflation and a pullback in customer spending.
Lower demand trends encouraged companies to contain price hikes, leading to a modest increase in selling charges.
Non-oil firms raised their staffing numbers for the first time in three months in December, while future output expectations staged a modest recovery from November's record low.
New orders retreated at the sharpest rate since May, with entities in the wholesale and retail sector witnessing a particularly steep decline.
Accordingly, non-oil companies cut their output levels further in December, and the rate of contraction quickened slightly from the previous month.
David Owen, Senior Economist at S&P Global Market Intelligence, said: "The Egypt non-oil economy rounded off the year with the fastest drop in sales for seven months over December, suggesting that the drag on demand conditions from inflation has not lost any power.”
"The latest official data showed headline inflation dipping to a six-month low of 34.6% in November, which was still incredibly high but nonetheless offered some positive signs,” Owen added.
He concluded: "The fact that firms were less keen to raise prices in December highlights how they still face a tricky balance between supporting demand or margins. Given the nature of the current inflation wave, relief on this conundrum is only likely to come from an easing of external political and financial headwinds."
