Egypt’s PMI for non-oil business improves slightly in December

Despite this improvement, the S&P report on Egypt noted that it indicates a solid deterioration in the health of the non-oil business sector.

The report said the accelerated inflation that Egypt is experiencing that is hampering the Egyptian non-oil economy indicated further declines in both output and new business.

“That said, the two metrics registered softer falls than in November, while cost inflation also slowed from November's over four-year high. Whilst output expectations improved to the highest since June, they still reflected a subdued level of sentiment towards the economic outlook," the report explained.

Accordingly, the sector's companies saw reduced employment levels for the second time in three months and cut input purchases at a rapid pace amid the ongoing supply constraints, the report pointed out.

David Owen, Economist at S&P Global Market Intelligence, expounded that Egypt’s PMI reading for December signals a decline in operating conditions across the non-oil business sector, as output and new business fell at sharp but softer rates, with companies mainly linking the downturn in sales to the elevating inflation.

"The pound's depreciation against the US dollar in recent months continued to drive input costs higher, although the latest data signalled a softer rate of inflation than November's over four-year record," Owen said.