Cairo – Mubasher: The headline seasonally adjusted Egypt Purchasing Managers’ Index (PMI) fell for the first time in three months in March to 48.0, compared with 49.3 in February. It also plunged to the lowest level since June 2020.
Egyptian non-oil private sector witnessed the quickest downturn last month since the initial impact of the COVID-19 pandemic, according to the IHS Markit survey.
The sector registered a faster decline in operating conditions, as new business fell for a fourth straight month while output decreased at the sharpest rate since last June. As national vaccine rollout accelerated, encouraging hopes for a strong economic recovery later this year.
Local companies saw a solid fall in activity that was the most marked for nine months. Meanwhile, new business inflows dropped at the joint-quickest rate during that same period. Nearly 12% of survey respondents recorded a decline in new work from February, due to weak market demand and ongoing COVID-19 restrictions.
Export sales shrank for the first time in three months, yet following a survey-record upturn. The decline allowed businesses to work on backlogs during March, which fell for the third month in a row. Reduction in workforces was partially caused by softer capacity pressures, which extended the run of job losses to almost a year and a half.
Inflationary pressures were recorded at the end of March, led by a solid increase in purchasing costs as a number of raw materials were marked up in price, mainly metals, plastics, and cardboard.
Meanwhile, salary costs were up for the first time since December 2020.
In addition, business estimates indicated a positive picture for the Egyptian economic outlook, as more than half of all respondents expected activity to rise over the coming 12 months.
Commenting on Egypt’s PMI survey results, David Owen, Economist at IHS Markit, said: “The outlook for future business activity was more positive, as businesses predicted that economic conditions will start to pick up soon as vaccines feed through to a greater reopening of the economy.”
He noted that “The expanding of the vaccine programme to more demographics played a key part in boosting expectations. Hopefully, this is a sign of improving demand in the near term and a recovery in output in the second half of the year.”
Egypt's non-oil private sector had worsened in February for the third successive month, yet at a softer pace when compared to January.
