Egypt Dec non-oil business activity contracts on FX, supply weakness -PMI

Egypt Dec non-oil business activity contracts on FX, supply weakness -PMI

Non-oil private sector activity shrank in Egypt for a 37th month in December as a weak currency and import constraints continued to hinder business, although confidence about future output rebounded from a record low, a survey showed on Thursday.

The S&P Global Purchasing Managers' Index (PMI) for Egypt inched up to 48.5 from 48.4 in November, yet remained below the 50.0 threshold that marks growth in activity.

"Survey evidence signalled that weakness in the pound and ongoing supply shortages played a major part in the downturn, as firms subsequently faced both rapid input cost inflation and a pullback in customer spending," S&P Global said.

Egypt's headline inflation slowed to an annual 34.6% in November but remained near September's all-time high of 38.0%, according to the state statistics agency CAPMAS.

The subindex for new orders slid to 46.9 from 47.3 in November, which respondents linked "to a drop in new orders and inflationary pressures," particularly in wholesale and retail, S&P wrote.

The output subindex dipped to 46.7 from 47.2, similarly indicating that increased prices had dampened client demand.

Business sentiment crept back up in December after having fallen in November to the lowest level since the business confidence subindex was created in 2012. The subindex rose to