Cairo – Mubasher: Egyptian non-oil enterprises saw softening of price pressures in December 2021, amid weaker rises in purchasing costs and salaries that led to the greatest slowdown in input cost inflation for more than three years, according to IHS Markit report on Tuesday.
The headline seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) reached its highest level in four months in December, signalling 49 compared to 48.7 in November.
Egypt’s PMI was closer to the 50 neutral thresholds last month and was above its long-run series average of 48.2 since April 2011.
Economist at IHS Markit, David Owen, said: “The latest Egypt PMI gave increased confidence that inflationary pressures peaked earlier in the fourth quarter and are now beginning to soften.”
Business activity was close to being stable in December, in spite of higher prices and weak demand which continued to stem new orders.
Egypt’s business expectations were higher than November yet continued to perform at a relatively subdued level.
Owen added: “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.”
Meanwhile, Egypt saw improvement in tourism activity, which has backed by new business in December, in addition to having a leap in export orders that was the strongest since February 2021.
The economist noted: “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.”
According to IHS Markit survey, approximately 23% of Egyptian firms were optimistic amid hopes of a recovery from the COVID-19 pandemic that collided with concerns over the Omicron variant as well as the impact of high prices.
In December, Egypt recorded softer rate of job reduction compared to November.
