Egypt's PMI records 49 in December

CAIRO – 4 January 2022: IHS Markit Egypt Purchasing Managers’ IndexTM (PMI) recorded 49 in December 2021, up from 48.7 in November. 

The index moved closer to the 50.0 neutral threshold and was above its long-run series average of 48.2 (since April 2011).

"The latest Egypt PMI gave increased confidence that inflationary pressures peaked earlier in the fourth quarter and are now beginning to soften. Input prices rose at the slowest rate since September, while the month-on-month drop in inflation was the quickest recorded for more than three years. Firms highlighted a weaker impact from raw material costs as step-downs

in global commodity prices helped suppliers to adjust their own fees,” Economist at IHS Markit, David Owen commented.

Owen clarified that higher selling prices continued to hinder new business volumes, which declined for the fourth month in a row. Output also fell, although the sub-index ticked closer to the 50.0 stabilisation mark and was above its long-run trend.

"Sentiment data showed that businesses remained relatively downbeat about their prospects in December, with confidence rising only slightly from November's 12-month low. Hopefully, a sustained drop in inflationary pressures could bolster optimism for future activity."

Egyptian non-oil businesses saw a softening of price pressures in the final month of 2021, according to the latest PMI figures.

Weaker increases in purchasing costs and wages led to the greatest slowdown in input cost inflation for over three years, while output charges also rose to a lesser extent. Business activity moved closer to stabilisation, although price increases and weak demand continued to stem new orders. Business expectations ticked up from November but remained at a relatively subdued level.