Egypt PMI steady in Nov as input costs rise

Cairo, December 5 (BNA) A survey showed on Sunday that Egyptian non-oil activity in the private sector contracted for the twelfth month in November as inflation expectations rose, causing new corporate orders to fall as fast as they could in a year.

IHS Markit’s Purchasing Managers’ Index (PMI) came in at 48.7 – below the 50.0 threshold that separates growth from contraction – unchanged from October.

IHS Markit said, according to Reuters, that the sharp rise in business costs continued to drive higher selling prices and lower demand in the Egyptian non-oil economy during November.

The sub-index for input cost inflation, at 63.7, was its second-fastest indicator in more than three years, beating only 64.5 in October.

“Loss of customer demand and slowdowns due to global supply chain issues have often been behind the slowdown,” she said. “Companies have noticed that high selling prices often hinder customer spending in the local market.”

The sub-index for future production expectations fell to 60.6, its lowest in a year, from 65.0 in October, with rising inflation expectations weighing on sentiment.

The production sub-index jumped to 47.7 from 47.5 in October, while the new orders sub-index fell to 48.6 from 48.7.

“Higher fuel and freight costs have often pushed up prices, including for raw materials such as food and paper,” IHS Markit said, adding that companies also raised wages in response to higher living expenses.

HF