Egypt’s non-oil business conditions deteriorate further in June, PMI shows

Egypt’s non-oil private sector experienced a further decline in business conditions in June, with contractions in output and new orders accelerating, according to the latest S&P Global Purchasing Managers’ Index (PMI) data released on Sunday.

The headline PMI fell to 48.8 in June from 49.5 in May, marking the fourth consecutive month below the 50.0 threshold that separates growth from contraction.

This decline was driven by weaker demand and a sharp reduction in purchasing activity, which saw its steepest drop in 11 months.

“June PMI data pointed to another mild decline in the health of the non-oil sector, driven by sustained decreases in incoming new orders and output volumes,” said David Owen, economist at S&P Global Market Intelligence.

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“Overall expectations for future activity were the lowest ever recorded in June, reflecting subdued hopes for order books, as well as concerns that geopolitical risks could cause greater economic disruption.”

Employment in the non-oil sector also decreased for the fifth month running, though the rate of job shedding was fractional. Firms expressed limited optimism towards future output, with confidence slipping to a record low.

On a positive note, input cost pressures softened, leading to a slower rise in output prices and offering some relief to businesses facing inflationary pressures.