Input price inflation in the Egyptian non-oil private sector eased to one of the weakest rates on record in November, according to the latest survey data.
A continued market slowdown led to solid drops in output and new orders, as well as the first fall in employment since July.
Businesses responded with the fastest reduction in output charges in the series history.
The headline seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) fell to 47.9 in November, from 49.2 in October, to indicate a further decline in operating conditions that was the quickest since September 2017.
Output contracted for the fourth consecutive month.
Moreover, the rate of decline strengthened to a solid pace, as businesses sought to limit activity due to a drop in new orders.
The rate at which new business fell also accelerated, with panellists linking this to a slowdown in the market.
This was additionally felt by exporters, with sales to foreign clients dropping solidly despite new contracts with firms in Saudi Arabia, Greece, Morocco and other countries.
With demand falling at a sharper rate, many Egyptian firms sought to stimulate sales with a reduction in output charges.
The overall decline was the quickest in the series history, and contrasted with a modest uptick in October.
Businesses offering discounts were helped by softer overall input cost inflation, which reached the second-slowest in the series history (ahead of March).
Falling import prices, due to a stronger exchange rate against the US dollar, curbed cost pressures.
Concurrently, some raw materials increased in price, including iron, cement and petrol.
Employment fell for the first time in four months in November.
Due to a lack of new business, several firms either reduced their workforce numbers or saw employees leave for other opportunities.
This led to an eighth successive monthly rise in backlogs, although the latest increase was marginal as falling demand eased pressure on capacity.
At the same time, purchasing activity improved for the first since July, albeit only slightly.
Stocks also grew, as some businesses anticipated future sales.
Vendor performance continued to strengthen, though the rate at which lead times quickened was marginal and the softest in four months.
Looking ahead, future sentiment decreased slightly in November, falling below the average for the series.
That said, it remained positive overall, with a high proportion of firms expecting output to rise in the coming 12 months.
Companies predicting a decline commented that they expect the current slowdown in market conditions to linger. ■
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