{"id":636754,"date":"2024-08-06T00:00:00","date_gmt":"2024-08-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/08\/06\/non-oil-private-sector-activity-remains-near-growth-territory-despite-dipping-in-july\/"},"modified":"2024-08-06T00:00:00","modified_gmt":"2024-08-06T00:00:00","slug":"non-oil-private-sector-activity-remains-near-growth-territory-despite-dipping-in-july","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/08\/06\/non-oil-private-sector-activity-remains-near-growth-territory-despite-dipping-in-july\/","title":{"rendered":"Non-oil private sector activity remains near growth territory despite dipping in July"},"content":{"rendered":"

Non-oil private sector activity<\/strong> was at its second highest level since <\/strong>August 2021,<\/strong> despite dipping in July<\/strong>, S&P Global\u2019s Egypt Purchasing Managers\u2019 Index (PMI) (pdf)<\/a> report showed. Egypt\u2019s non-oil activity held near the growth threshold at the start of 3Q 2024, with companies seeing only marginal declines in output and new orders, resulting in businesses reducing their purchases, according to the report. Despite the dip in activity, \u201cthe Egyptian non-oil economy still appears to be on the cusp of expansion,\u201d said S&P Global Market Intelligence Senior Economist David Owen.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

We were hoping that this would be the month that we would finally be in the green: <\/strong>The index dipped slightly to 49.7 in July, down from an almost three-year peak of 49.9 in June<\/a> \u2014 marking the 44th straight month that the country\u2019s non-oil private sector has been in contraction. Last month the index showed us only 0.1 point away from the 50.0 mark that separates growth from contraction, giving some hope that July would show the private sector finally entering growth territory.<\/p>\n

Orders were down again after having been up for the first time in 34 months the month <\/strong>before: <\/strong>After new orders rose in June for the first time since August 2021, July witnessed a fall in new orders with 9% of businesses surveyed reporting a decline in sales, while 7% reported an increase. Input purchases fell their fastest in four months, as companies adjusted their purchases to reflect a dip in orders. <\/p>\n

Despite the dip in new orders overall, export orders were up: <\/strong>An uptick in demand from abroad led to new export orders increasing for the third consecutive month. There was also encouraging news on the employment front, as employment inched back up after falling the month before on the back of a belief that sales will soon pick up.<\/p>\n

Inflation was once again putting pressure on the non-oil private sector:<\/strong> Input prices spiked for the second month in a row, hitting their steepest pace since March, with 14% of firms reporting a rise in prices. However, the overall rate of input price inflation remained softer than the broader trend of the past two years and led to only a modest rise in selling prices.<\/p>\n

Business sentiment improves slightly, but remains subdued:<\/strong> Non-oil firms forecast a boost in activity over the next 12 months as market optimism grows. Inflationary pressures were \u201csubdued compared to heightened rates in recent years,\u201d according to Owen, but a \u201cslight pick-up in input cost inflation in July\u201d could leave firms uncertain about prices picking up again. He added that \u201cwhile some firms pointed to a turning of the tide in economic conditions, particularly through rising export demand, market conditions were stated as weak elsewhere.\u201d<\/p>\n

ELSEWHERE IN THE REGION- <\/strong><\/p>\n