CAIRO, Reuters – Egypt’s private non-petroleum sector activity contracted in October for the 11th consecutive month. International supply chain bottlenecks slowed production which impacted future output forecasts. A survey was conducted Wednesday.

IHS Markit’s Purchasing Managements’ Index (PMI), fell to 48.7 – just below the threshold of 50.0 that distinguishes growth and contraction – down from 48.9 in September.

IHS Markit stated that there were increasing concerns from firms about supply disruptions in the future and could limit economic recovery. This would lead to a significant fall in output forecasts since September’s record high.

The difficulty of acquiring vast quantities of raw material and component components caused non-oil Egypt companies to decrease their output.

IHS Markit said that the fastest decline in input stocks since June 2020 was due to firms drawing down inventories to help business activity.

In September, the future output sub-index fell from 85.7 to 65.0. This was likely due to worsening supply chain disruptions that seem to have weighed heavily on companies.

David Owen, an economist at IHS Markit said that firms were especially concerned about high inflation as it could cause a decline in demand and reverse economic recovery.

While the new orders subindex fell to 48.7 in September from 49.1 last month, the output subindex declined to 47.5.

IHS Markit stated that only 32% of businesses expected a rise in production over the following year. However, this was much more than the 2% who predicted a decrease.