Egypt: PMI rises in June; continues to signal worsening of non-oil private-sector conditions
The S&P Global Egypt PMI rose to 49.9 in June from 49.6 in May. Together with June 2021’s print, June’s result were the joint-highest since November 2020. As a result, the index remained below the 50.0 no-change threshold—below which it has languished since December 2020—but signaled a softer deterioration in non-oil private-sector operating conditions compared to the previous month.
Key drivers behind the latest PMI reading include the first increase in new business intakes since August 2021. This uptick in new orders reflected improving domestic and international market conditions. Additionally, the volume of input purchases rose for the first time since December 2021, and the rate of output contraction was the softest in nearly three years.
Input cost inflation accelerated to a three-month high in June, yet it remained softer than the levels seen during the country’s foreign currency crisis earlier in the year. Despite this uptick in input costs, businesses reported only modest increases in selling prices. Finally, business confidence dipped to its lowest recorded level, reflecting mixed feelings about future economic prospects amidst the recent financial volatility.
David Owen, senior economist at S&P Global Market Intelligence, said:
“Although output levels continued to fall on average, they were also close to growth territory, as business capacity was helped by a fresh increase in the buying of inputs. If we see further rises in sales and purchases in the second half of this year, firms should have the motivation and need to expand their output.”