Cairo – Mubasher: Egypt’s headline seasonally adjusted Purchasing Managers’ Index (PMI) reached 49.2 in August 2023, remaining the joint-highest level in exactly two years.

Non-oil companies witnessed modest drops in activity and new orders in the latest survey period.  They underlined that a stronger round of cost inflation had constrained output.

Furthermore, weak exchange rates, raw material supply issues, and wage pressures led to the fastest increase in business expenses for five months.

Business activity's decline was still modest and among the softest recorded in the current two-year sequence of retreat.

During August, firms reported a much sharper reduction in input buying compared to July, citing that weaker orders, supply issues, and higher input price inflation had reduced spending appetites.

David Owen, Senior Economist at S&P Global Market Intelligence, said: "The Egypt PMI continued to hover close to the 50.0 neutral threshold in August.

“The findings suggest that the sector has somewhat stabilised in recent months after a prolonged period of contraction,” Owen added.

He indicated: "However, a pick-up in inflationary pressures was also indicated by the August survey findings, with some firms noting that a faster increase in input costs had reduced overall activity.

“Comments from surveyed companies suggest that exchange rate problems and cost of living pressures will need to be fully addressed before the country can escape the detrimental effects of inflation which currently runs at a record high."