Cairo - Mubasher: Egypt’s non-oil private sector began 2017 in the same way that it ended 2016, with economic conditions worsening again, according to a recent survey, sponsored by Emirates NBD and produced by IHS Markit.
On the price front, greater cost pressures led firms to raise their average prices charged at the highest rate in the survey history to date. Simultaneously, firms were reluctant to take on additional staff, and employment declined for the 20th consecutive month.
The headline seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) posted below the crucial 50 mark for the 16th month in a row. Despite rising from 42.8 in December to 43.3 in January 2017, the latest reading was consistent with a sharp deterioration in business conditions.
“January’s survey provides little evidence that an economic recovery is yet underway at the start of 2017. It is, however, encouraging that the new ‘Future Output Index’ of the PMI suggests that firms have become increasingly optimistic on the economic outlook following November’s devaluation of the EGP,” Jean-Paul Pigat, Senior Economist at Emirates NBD, said.
The sub-50 PMI reading mainly reflected lower output and new work during January. Both fell simultaneously for the sixteenth month in a row. Anecdotal evidence highlighted a general inflated market and the ongoing economic downturn. Another factor leading total new work to fall was a marked contraction in new export work, which reportedly occurred due to security concerns across key markets in the Middle East, according to the report.
In response to falling output requirements, Egyptian non-oil private sector companies lowered employment further in January, marking a 20-month sequence of job losses.
The rate of job shredding was among the most marked in the survey history so far. Also, staff had either reportedly left their posts searching for better job opportunities or retiring.
Outstanding business increased in January, the average vendor performance worsened sharply in the first month of the year amid reports of raw material shortages.
