IHS Markit Egypt Purchasing Managers’ Index™ (PMI) for the month of October was 48.7, down from 48.9 recorded in the previous month. This comes on the back of a widening supply chain crisis, where inputs are scarce.
The supply chain crisis could have a negative impact on the prices. Therefore, inflation is a genuine concern among Egyptians, judging by weakened confidence in the same month of October compared to record highs observed in September 2021.
The supply chain crisis is affecting the non-oil sector the most, and export sales fell the most in 17 months. The disruption in inventories for the non-oil private sector is likely to continue until the end of the year, further disrupting the country’s recovery from the pandemic.
Egypt’s PMI has been on a recovery path since May 2021. The latest slump is the second in consecutive months, which, if it continues in November, could mean a sharper rise in output prices by the end of the year.
Already, there is inflationary pressure across several inputs. These include metals, plastics, wood products as well as construction materials. More so, rising freight costs are not doing any favors to the manufacturing sector. Producers are beginning to add a mark-up on their products to cover the increasing costs of inputs.