Egypt’s non-oil business activity contracts further in October, PMI shows

CAIRO: Activity in Egypt’s non-oil private sector continued to decline in October as strong cost pressures dampened new order volumes, S&P Global reported on Tuesday.

The S&P Global Egypt Purchasing Managers’ Index (PMI) inched up to 49.0 in October from 48.8 in September, remaining below the 50.0 threshold that indicates growth.

This marks the second consecutive month of contraction, driven by declines in both output and new orders.

“Price pressures had continued to restrain the sector from returning to growth territory,” said David Owen, Senior Economist at S&P Global Market Intelligence.

The construction sector was particularly hard hit by rising material costs, Owen noted. Despite the challenging environment, employment levels increased for the fourth month in a row, with the pace of job creation reaching its fastest since May.

Firms also continued to build inventories amid cost concerns, although total input purchases fell for the first time in three months.

Export demand provided a bright spot, with export orders posting their third-highest reading on record, supported by a more stable currency and lower exchange rates against the US dollar.

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Looking ahead, business confidence remained weak, with only 4% of respondents expecting a rise in activity over the next 12 months, marking the lowest level of optimism since June.

Manufacturing, construction, and wholesale & retail firms remained positive, but services businesses were more pessimistic about future prospects.