Egypt’s non-oil business activity shrank “moderately” during November, with a closely followed gauge of business conditions unchanged from the month prior as supply chain bottlenecks and inflationary pressures continued to weigh on private sector firms.
The IHS Markit Purchasing Managers’ Index (PMI) (pdf) remained at 48.7 last month, marking the twelfth consecutive month it has been below the 50.0 mark that separates expansion from contraction.
Inflationary pressures and global supply chain shortages were mostly to blame, with new business falling at the quickest pace in six months. Output fell for the third month in a row, as output price inflation rose at the second-fastest pace since mid-2018, providing a challenging outlook for future prices. Inflation has inched up in recent months, reaching a 20-month high in September, and although the headline rate fell back slightly in October food and fuel price growth remained elevated.
Higher costs, mixed demand signals: The cost of shipping, energy and raw materials continued to rise sharply, leading to more expensive end-products. Input cost inflation was at its second fastest in over three years. “Higher selling prices deterred client spending in the domestic economy,” said David Owen, IHS Markit economist. New order volumes fell at their fastest rate since May, but export volumes rose for the first time since August.
Vendor performance went into reverse for the first time since June due to global supply chain disruptions. Meanwhile, a slowdown in sales prompted companies to tone down their purchases, further depleting their stock inventories.
