Cairo – Mubasher: Egypt’s non-oil private sector has marked four-month high in December as input inflation cost eases.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index™ (PMI) rose to 49.6 in December from 49.2 in November, indicating “a softer deterioration in the health of the sector”, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit on Thursday.
“The annual average PMI scores have improved from 46.0 in 2016 to 47.5 in 2017 and 49.5 this year, and indications are that this improvement will continue in 2019,” MENA Economist at Emirates NBD Daniel Richards commented.
“While external rebalancing and public investment have driven the growth recovery in Egypt to date, private sector activity has lagged somewhat, but the expectation is that it will see something of a recovery in 2019,” Richards said.
He also pointed out that the North African nation’s growth recovery will be bolstered by the World Bank Group which has recently ensured its commitment to the Egyptian private sector.
Output at non-oil private Egyptian firms eased in December at a slightly faster rate, whilst purchasing activity was solid as many firms expanded input buying in response to new business gains, the survey said.
Employment contracted marginally last month, completing a full quarter of job shedding. However, the level of outstanding business growth was fractional at the weakest rate in six months, the survey highlighted.
Input cost inflation slashed in December, “setting a new record low across the survey history” on the back of a slight increase in purchase prices in over six years.
Salaries maintained solid growth in December, but at a weaker pace as compared with November, while output prices rose marginally, it added.
“Sentiment remained relatively subdued across Egypt’s non-oil private sector in December. Most companies expect output to be unchanged in the coming 12 months, while 24% forecast an improvement, with a few planning to grow their business,” according to the survey.
