Egypt’s non-petroleum private sector activity shrank for the ninth month in a row in August, but inched closer to growth as local firms rapidly expanded their purchasing on increased demand.
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.
IHS Markit said purchasing activity expanded for the first time in nine months and at the quickest pace since the series began in April 2011.
Egyptian firms sought to build their input stocks in August amid concerns that rising new orders and supply-side pressures would lead to further price increases.
The sub index for the number of purchases jumped to 54.9 from 47.6 in July, while the purchase costs sub index climbed to 58.7 from 54.1.
IHS Markit revealed that input price increases accelerated to their fastest in two years, development firms linked mainly to a pandemic-related tightening of the international prices of commodities such as metals, timber, and plastics.
It added that this and higher demand has sparked worries of further price increases even as the new orders sub index expanded to 50.4 from 48.7, it’s the quickest since November.
IHS Markit economist David Owen said firms seeing an improvement in demand attributed this to a revival in market activity and rising tourist numbers following the pandemic.
