Cairo, (Business News Report)|| Non-oil Egyptian commercial activity witnessed a sharp decline last April, under pressure from inflation and global supply chain problems.
Egyptian employment in non-oil commercial activity decreased at the fastest pace in a year due to the deterioration of working conditions, with the second strongest rate since June 2020.
The Purchasing Managers’ Index (PMI) showed that non-oil business activity in Egypt has declined, under pressure from inflation, supply problems, and geopolitical tensions.
David Owen, an economist at Standard & Poor’s Global, said that in April, non-oil private sector companies in Egypt faced another increase in material and energy costs due to the war in Ukraine and the depreciation of the pound in late March.
The central bank allowed the pound to fall about 15% against the dollar on March 21, after keeping the currency virtually constant for the previous 18 months.
Although the Purchasing Managers’ Index issued by P&S rose to 46.9 in April from 46.5 in March; But it is still in contraction for the 17th month in a row.
The Egyptian non-oil companies recorded a noticeable decrease in new orders during April, as demand from customers was again met by the increase in the cost of living and selling prices, which led to a decrease in the total new business for the eighth month in a row, as weak domestic demand went in parallel with the decrease in new exports.
Companies are anticipating more price and supply challenges, especially with the ongoing war in Ukraine, which has led to other relatively pessimistic business forecasts, Owen said.
Kamal El-Desouky, a member of the Board of Directors of the Federation of Egyptian Industries, said that the Purchasing Managers Index continuing to remain below the 50-point level is expected in light of the waves of inflation, the rise in the price of the dollar, government measures to limit imports, and the risks and length of the Russian-Ukrainian war.
These factors led the non-oil producing sector to shrink to this level as a result of weak demand and the reduction of spending, and this situation could continue for several more months until the global situation changes, which appears to be facing an upcoming recession, including Egypt, he said.