CAIRO (Reuters – Egyptian non oil activity shrank in November due to rising inflation expectations. New business orders fell by the fastest rate in a whole year.

IHS Markit’s Purchasing Managements’ Index (PMI), which was unchanged from October, came in at 48.7 – below the threshold of 50.0 that distinguishes growth and contraction.

IHS Markit reported that the Egyptian non-oil market saw a sharp rise in its business costs during November. This led to higher selling prices, and less demand.

At 63.7, the input cost inflation subindex was second fastest in more than three years. Only October’s 64.5 beat it.

According to the report, “A decrease in client demand and slowerdowns due global supply chain issues are often responsible for the downturn.” The companies noted that domestic customer spending is often curtailed by high selling prices.

With higher inflation expectations and sentiment weighing down, the sub-index of future output expectations fell to 60.6. This is its lowest point in one year.

From 47.5 in October’s output sub-index, it rose to 47.7. The new orders sub-index dropped to 48.6.

IHS Markit stated that higher fuel costs and shipping costs can often lead to increases in prices. Companies also raise wages to meet rising living expenses.