Cairo – Mubasher: Egypt’s non-oil private sector headed towards stabilisation in June, while new orders and employment contracted at softer rates, making up the rapid reduction in output.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) rose to 49.4 during June, from 49.2 in May, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.
“The June contraction shown by the PMI was marginally slighter than that in May, but the failure to consistently post above the 50.0 mark reflects the fact that Egypt’s economic recovery has to now been achieved primarily through external rebalancing and government investment, and that the private sector continues to lag,” MENA Economist at Emirates NBD Daniel Richards commented.
Output slightly fell at the end of the second quarter, driven by weaker demand, contracting the business activity, the survey said.
Moreover, non-oil private sector companies reported a decline in new orders and export orders during June, which is lower than observed in May, the survey added.
Staffing levels eased at the slowest rate since June 2015, dragged down by the decrease in volumes of new business.
“However, job shedding was only fractional, softening from the prior survey period to the second-slowest pace observed in the current 37-month sequence of contraction,” the survey noted.
Purchasing activity fell marginally in June, as firms reported a lack of liquidity and stocks of purchases maintained slipping to a lesser extent than that observed mid-quarter.
Companies reported inflationary pressures and an increase in overall input costs during June, the survey said, pointing out that the inflation rate accelerated slightly from May.
Average selling prices rose during June due to rising cost burdens and output prices grew at an accelerated pace.
Businesses optimism boosted from May, expecting further investments and new contracts, as well as output to grow over the coming year.
