Egypt’s non-oil private sector businesses saw a softer drop in operating conditions in May, as high inflation and demand levels were slightly eased, according to the S&P Global Egypt Purchasing Managers’ Index™’s (PMI™) survey posted on June 5th.

The headline seasonally adjusted S&P Global Egypt Purchasing Managers’ Index (PMI) increased for the second month in a row to 47.8 in May from 47.3 in April, the data showed.

Business activity and sales signaled a downswing as firms attempting to reduce output. However, this fall was the softest in nearly a year-and-a-half period.

The new orders sub-index slightly declined in May as compared to its record in April, marking the highest reading in seven months.

“The two main sub-indices of Output and New Orders rose to their highest levels in 17 and seven months, respectively,” David Owen, Senior Economist at S&P Global Market Intelligence, said.

“Positivity in the services economy – where new business intakes rose for the second time in three months – suggests that demand could make further strides towards a recovery in the coming months,” he added.

The report revealed that inflationary pressures have eased from the multi-year highs witnessed towards the end of 2022 and early 2023.

Moreover, the survey showed that the rising input cost and demand pressures in Egypt weighed on inventories and contributed to a contraction in purchasing activity.

As regards the outlook, non-oil businesses showed the lowest level of confidence ever, with concerns over the demand conditions, persisting inflation, and supply issues. Only 6% of firms showed optimism about output levels over the upcoming year.

 

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