Cairo – Mubasher: The Egyptian non-oil private sector continued the downward trend in February, as business conditions worsened for the 17th month in a row, according to the Purchasing Managers' Index (PMI), sponsored by Emirates NBD and produced by IHS Markit.
The latest downturn was triggered by sharp declines in both output and new work. However, the respective rates of contraction eased since January.
Companies reduced their payroll numbers again due to lower output requirements. Meanwhile, the weak exchange rate relative to the US dollar continued to be a key factor behind steep increases in output charges and cost burdens, the report said.
Tim Fox, head of research and chief economist at Emirates NBD, commented: “While the PMI data still indicated a contraction in Egypt’s private sector in February, the headline index rose to its highest level in six months.
“New export orders were only marginally lower than in January, signalling improving external demand, and the rate of decline in output was slower last month. Inflationary pressures remain high, but the rate of input price inflation eased markedly in February. Overall, there are signs of stabilisation in the non-oil private sector,” he added.
The headline seasonally adjusted Egypt's score of 46.7 in February, despite rising from 43.3 in January,
On the price front, Egyptian non-oil private sector companies recorded a further rise in overall input costs during February, driven by higher purchasing prices and, to a lesser extent, staff costs, the report stated.
Companies reduced their purchasing activity for the 17th straight month in February, as employment in Egypt’s non-oil private sector fell for the 21st month in a row.
Finally, the degree of optimism among Egyptian firms improved to an eight-month high, with companies expecting market conditions to improve, thereby boosting output over the coming year, the report said.
