Brightening in the Egyptian Business Sky: Slightly Slowed Decline in Business Sentiment

In Egypt's non-oil private sector, a cautious glimmer of hope is emerging on the horizon. The latest Purchasing Managers' Index (PMI) from S&P Global recorded a slight increase in November to 49.2, compared to 49.0 in October. Thus, the index is slowly approaching the growth threshold of 50.0 but remains in a range that suggests a slight contraction. S&P economist David Owen notes that the decline in production and new orders slowed in November, which could indicate a stabilization of business conditions. Although production levels dropped for the third consecutive month, some companies reported an increase in new orders, marking an initial glimmer of hope for a potential recovery. The production sub-index improved to 49.1 from 47.9 in October, while the sub-index for new orders rose to 48.7 from 47.6. Particularly the manufacturing industry managed to score with a slight increase in orders, partially compensating for declines in the construction, wholesale, and retail trade, as well as the services sector. Nevertheless, jobs did not remain stable in November, as employment figures fell for the first time after a four-month growth spurt. Reasons cited included lower sales figures and weaker business confidence, prompting companies not to fill vacant positions. It is also noteworthy that input prices rose the slowest since July at 55.9, indicating a four-month low in cost inflation. This was aided by slower wage growth. At the same time, purchasing prices continued to rise, partly due to the stronger US dollar. Companies also remain skeptical about future business activity, as reflected in the low expectations for the coming twelve months.