The activity of the non-oil private sector has decreased significantly during last March, according to S&P Global’s Purchasing Managers’ Index, which scored 46.5 points (out of 50), a significant decline from the 48.1 points level recorded last February.
The Purchasing Managers’ Index subcomponents data showed that Egyptian non-oil producing companies suffered the worst declines in production, new orders, and stocks of purchases since the first wave of the coronavirus pandemic.
According to S&P Global, Egypt’s non-oil economy suffered a sharp downturn in business conditions in March, as increased inflationary pressures on energy, food, and raw materials due to the Russia-Ukraine war led to a sharp decline in production and new orders.
The statement added that with sales declining and confidence declining, Egyptian companies reduced the number of employees for the fifth month. The rate of reduction was the fastest since last November. “While the 14% devaluation of the Egyptian pound on March 21 may provide some support in the short term, it is also likely to accelerate cost pressures,” said David Owen, an economist at S&P Global. “Some companies have already seen a rise in import prices, which may restrict production and further increase selling prices.”