Egypt’s non-oil private sector contracted in October to its lowest level since May amid an international supply chain crisis, a survey showed.
The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index edged down to 48.7 in October, compared to 48.9 in September. A reading above 50 indicates expansion, while a reading below that signals contraction.
“Egyptian firms started to feel the burden of material shortages on both output and inventories, with the latter decreasing at the sharpest rate in 16 months. This will likely spill over into further reductions in output by the end of the year,” David Owen, an economist at IHS Markit, said.
As output fell due to supply chain delays, input prices and output charges increased at the quickest rates since August 2018. Meanwhile, companies increased their input buying for the third month in a row during October.
“Worsening supply chain disruption appeared to weigh more heavily on firms’ projections for future output in October. After climbing to a record high in September, the respective index saw its largest ever monthly decline of over 20 points, bringing expectations down to the lowest since April.”
“Firms were particularly concerned that high inflation could lead to a slump in demand and reverse the economic recovery seen since COVID-19 restrictions were eased.”
