PMI at 47.2: Non-oil private sector in Egypt continues to contract

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Under the pressure of inflation, the weakness of the local currency, and the continued restrictions on imports, the activity of the non-oil private sector in Egypt continued to contract, recording 47.2 points last December, to remain below the 50-point level separating growth from deflation.

The Purchasing Managers’ Index (PMI) has shown a strong deterioration in the performance of the Egyptian non-oil sector, as rapid inflation continued to hamper the economy at the end of 2022.

Companies indicated a further decline in production and new business. They also cut staffing levels and reduced purchases of production inputs. Decreased activity reflected weak demand, as higher prices prompted customers to cut additional spending. Output levels also fell at the most robust rate since June due to a sharp drop in purchasing activity. Material prices often limited purchasing activity, although companies cited weak financial liquidity and supply shortages as driving the decline. The shortage of production requirements also led companies to withdraw from their stocks to meet demand, which led to a further decline in stocks. PMI also indicated a rapid increase in the costs of production inputs.