According to a survey released on Sunday, Egypt’s non-oil private sector activity dropped in April, continuing a 17-month downward trend as the Ukraine conflict added to price rises.
The S&P Global Egypt Purchasing Managers’ Index rose to 46.9 in April from 46.5 in March, although it remained below the 50.0 threshold that distinguishes growth from contraction.
‘While the slump slowed slightly from March, it was still the second-fastest in just under two years as firms reported implementing cuts owing to increased input costs,’ according to S&P Global.
Higher global food and raw materials prices continued to cause steep drops in output and new orders, but at a slower rate, with the sub-index for overall input prices climbing to 58.3 from 58.6 in March and the sub-index for purchase costs rising to 58.8 from 59.1.
‘Cost pressures arose mostly as a result of higher energy and raw material prices as a result of the Ukraine conflict’,’according to S&P Global.
Many panellists also discussed the Egyptian pound’s recent depreciation. Despite a slight easing, total input price inflation remained robust and above the average observed in 2021.
On March 21, the Bank of England allowed the pound to fall by 14% against the dollar after keeping it largely stable for the preceding 18 months.
The reduction in output and new orders continued in April, while the output index, at 45.3, was marginally better than the 44.6 recorded in March. The new order index increased to 45.3 from 45.1 previously.
The sub-index for future output forecasts rose to 57.7 in March from 52.5 in March, when it was at its lowest level since the poll began 10 years ago. The figure for April was the third lowest in a decade.
‘Firms predict greater price and supply issues as the crisis in Ukraine continues, resulting in another relatively bleak forecast for commercial activity,’ said S&P Global analyst David Owen.
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