File Photo: Workers at a food processing factory. Photo courtesy of World Bank.
The headline Egypt PMI rose to 49.2 in October from 48.8 in September, remaining above the long-term series average of 48.2. While still below the neutral 50.0 threshold, the reading signals only a marginal deterioration in overall business conditions.
The October survey indicated a more stable performance across non-oil sectors, with manufacturing activity helping offset weaker trends in services, retail, and construction. New orders declined at a softer pace, with some firms reporting signs of improving market conditions. Manufacturing was the only sector to record an increase in new business volumes.
Purchasing activity and employment levels also showed signs of stabilization. Input buying was broadly steady after seven months of contraction, while workforce numbers rose for the third time in four months, albeit modestly. Backlogs of work increased for a second consecutive month.
David Owen, Senior Economist at S&P Global Market Intelligence, said the October PMI reading suggests Egypt’s GDP growth rate remains on track at around 4.6 percent year-on-year (YoY). “Demand indicators are picking up, hinting that momentum in domestic markets has improved slightly at the start of the fourth quarter,” he noted.
Business sentiment improved, with firms expressing cautious optimism about future activity, supported by expectations of stronger client demand and domestic recovery.
However, cost pressures intensified. Input prices rose at the fastest rate in five months, driven by the sharpest increase in wage inflation since October 2020. Firms cited rising living costs as a key factor behind staff pay revisions. Higher supplier prices and fuel costs also contributed to inflationary pressures.
Despite the uptick in input costs, selling price inflation eased slightly, as firms absorbed much of the increase to maintain competitiveness and support sales volumes.
Boosting the private sector is a key component of Egypt’s new economic narrative launched in September, which aims to raise the country’s real GDP growth to seven percent and create 1.5 million new job opportunities.
Redefining the state’s role from operator to regulator and enabler is also a central objective under the new narrative, positioning the private sector as the main engine of sustainable economic growth and job creation.
An International Monetary Fund (IMF) mission is expected to arrive in Cairo this November to begin discussions on the fifth and sixth reviews of the current $8 billion Extended Fund Facility (EFF) loan programme, along with the first review of the $1.3 billion Resilience and Sustainability Facility (RSF).
All reviews are expected to be completed in December.
Short link: