Business activity enters a fourth year of contraction: Non-oil privatesector activity contracted again in December as currency weakness and supply shortages dampened demand, according to S&P Global’s purchasing managers’ index (pdf) published on Thursday. The index inched up to 48.5 from 48.4 in November, which despite the marginal improvement, still remained below the 50 threshold that separates growth from contraction for the 37th straight month.

TL;DR: "The Egypt non-oil economy rounded off the year with the fastest drop in sales forseven months over December, suggesting that the drag on demand conditions from inflation has not lost any power,” S&P Global Economist David Owen said.

Businesses avoided steep price hikes in an attempt to sustain demand: December’sneworders saw their steepest drop since May. While companies incurred higher expenses and were forced to trim their output levels due to inflationary pressure, they “were less keen to raise prices in December [as] they still face a tricky balance between supporting demand or margins,” according to Owen.

On the plus side, new hires picked up: Staffing numbers in non-oil businesses in Decemberincreased for the first time since September in a bid to boost capacity to make up for outstanding business in each of the previous five months, the report said.

Business sentiment has also rebounded from November’s record low, as a larger number ofparticipants surveyed by S&P Global were optimistic that activity will pick up and economic challenges subside.

The story got the attention of the international press:Reuters.

Tags: