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Egypt PMI inches closer to growth as purchasing increases

Dubai- Masaader News

Egypt’s non-petroleum private sector activity shrank for a ninth month in a row in August, but inched closer to growth as local firms rapidly expanded their purchasing on increased demand, a survey showed on Sunday, according to Reuters.

IHS Markit’s Purchasing Managers’ Index (PMI) climbed to 49.8 – just below the 50.0 threshold that separates growth from contraction – from 49.1 in July.

“Purchasing activity expanded for the first time in nine months and at the quickest pace since the series began in April 2011,” IHS Markit said.

Egyptian firms sought to build their input stocks in August “amid fears that rising new orders and supply-side pressures would lead to further price increases.”

The subindex for the quantity of purchases jumped to 54.9 from 47.6 in July, while the purchase costs subindex climbed to 58.7 from 54.1.

Input price increases accelerated to their fastest in two years, a development firms linked mainly to a pandemic-related tightening of the international prices of commodities such as metals, timber and plastics, IHS Markit said.

This and higher demand has sparked fears of further price increases, it added.

The new orders subindex expanded to 50.4 from 48.7, its quickest since November.

“Firms seeing an improvement in demand attributed this to a revival in market activity and rising tourist numbers following the pandemic,” IHS Markit economist David Owen said.

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