Non-oil companies in Egypt reported a sharp decline in business activity levels in September, reversing the first growth seen in three years in August, S&P Global said in a new report on Thursday.

Rising price pressures dampened sales and slowed business activity, as the headline seasonally adjusted S&P Global Egypt Purchasing Managers’ Index (PMI) fell to 48.8 in September from 50.4 in August.

The reading was the weakest since April, following the first instance of growth in August (50.4) since November 2020.

“As cautioned as a possible risk last month, rising price pressures curbed the non-oil private sector’s recovery in September,” said David Owen, Senior Economist at S&P Global Market Intelligence.

With input cost inflation at a six-month high and output charges rising accordingly, albeit to a softer degree, firms reported having a dampening effect on customer orders, leading them to scale back business activity, he said.

Despite the challenges, business confidence in the 12-month activity outlook remained positive in September. However, optimism softened compared to August, hitting a three-month low, the report said.

(Editing by Bindu Rai; bindu.rai@lseg.com)