Business activity in Egypt's non-oil economy grows for 1st time since late 2020
(MENAFN) In August, Egypt's non-oil Economy experienced its first expansion since late 2020, driven by increased output and higher demand. The seasonally adjusted S&P Global Egypt purchasing managers’ index (PMI), a key indicator of the nation's economic health outside the oil sector, rose to 50.4 in August from 49.7 in July. This figure remained above the neutral 50 mark, which separates economic growth from contraction, signaling a positive shift in business activity.
David Owen, senior economist at S&P Global Market Intelligence, highlighted that business conditions have shown improvement based on the August survey data. The PMI sub-indexes indicated growth across several areas, including output, employment, and purchasing activity. This suggests that firms are expanding their operations and capacity with a renewed sense of confidence. Business expectations have also risen, reflecting hopes for a more stable economic environment in the near future.
The survey results revealed a recovery in demand within Egypt, the Arab world's most populous country. Companies have increased hiring and bolstered their inventories as optimism about future business prospects grows. This marks the second consecutive month of rising recruitment, underscoring expectations for further business activity.
However, the economic environment remains mixed. Inflationary pressures have increased, with companies facing higher costs due to a weakening of the pound against the US dollar. As a result, businesses have raised their selling prices to maintain profit margins amid rising input costs. Additionally, wages have been adjusted upward to address cost-of-living pressures. Despite these positive signs, many companies still report weak client demand, leading to a slight decrease in new orders. Rising price pressures are a concern, as they could limit consumer spending and hinder the overall market recovery, according to Mr. Owen.
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