4/10/2022–|Last update: 4/10/202206:02 PM (Mecca)
A survey revealed today, Tuesday, that the non-oil private sector in Egypt shrank for the 22nd consecutive month, last September; Companies were affected by the faltering economy. At a time when the non-oil private sector in Saudi Arabia remained solid, driven by a relatively strong recovery in production and new orders.
The Standard & Poor’s Global index of purchasing managers in Egypt remained unchanged compared to last August at 47.6 points, which is less than the 50 points level separating growth and contraction.
Standard & Poor’s Global said that “business conditions in the non-oil economy in Egypt continue to suffer from inflationary pressures, rationalization of energy use, import restrictions and weak demand at the end of the third quarter.”
Egypt suffers from an acute shortage of foreign currency, and the government ordered dimming of lighting in city squares and decided to close shops and malls relatively early to save natural gas for export.
The Central Agency for Public Mobilization and Statistics stated last September that annual inflation in Egyptian cities rose to 14.6 percent on an annual basis last August, while it was at 13.6 percent on an annual basis last July.
Production and new orders in September continued a contraction that began in August last year, as the production index fell to 45.4 from 45.8 on a monthly basis, while the new orders index rose to 45.9 from 45.1.
“Non-oil activity in Egypt continued to be negatively affected by weak demand, geopolitical tensions and increased inflation in the last month of the third quarter,” said Shreya Patel, an economist at Standard & Poor’s Global.
The sub-index for future production expectations rose slightly to 55.7 from 53.5, but remained near the 10-year low recorded in March of 52.5.
Growth of the non-oil sector in Saudi Arabia
On the other hand, the same survey showed that the non-oil private sector in Saudi Arabia remained solid last September, driven by a relatively strong recovery in production and new orders, but its growth was slower than last August due to the decline in sentiment.
The Standard & Poor’s Global Purchasing Managers’ Index, adjusted in light of the seasonal factors for the entire economy, fell to 56.6 last September, compared to 57.7 last August, remaining significantly higher than the 50.0 points reading that indicates growth.
“Saudi Arabia’s non-oil private sector economy maintained an impressive pace of growth in September, especially against the backdrop of increasingly challenging global economic conditions,” said David Owen, an economist at Standard & Poor’s Global Market Intelligence.
“Both production and new orders increased at rates that exceed their current average growth in 25 months,” he added.
The production sub-index, which measures business activity, fell to 59.5 last September, compared to 61.5 last August. During the year, the pace of the index’s growth in September only exceeded its growth in last August and June.
The employment sub-index recorded the slowest pace of expansion since last January.