Cairo – Mubasher: Egypt’s non-oil private sector returned to expansion in November, ending a 25-month sequence of deterioration, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit on Tuesday.
The Egyptian non-oil private sector has been improved on the back of renewed growth of output, higher inflows of new orders, and stocks of purchases, the report highlighted.
On the price front, rates of both input cost and output price inflation eased below their respective long-run averages.
“Egypt’s PMI readings turned positive in November, signalling an expansion in the non-oil sector for the first time in over two years,” MENA Economist at Emirates NBD Daniel Richards commented the Egypt PMI survey.
“This suggests that the wide-ranging economic reforms embarked upon in November 2016 as part of an IMF-sponsored programme are beginning to bear fruit.
“Strong sentiment towards future prospects chimes with our view that the Egyptian economy will continue to strengthen over the coming quarters,” Richards added.
The headline seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) at 50.7 in November, the strongest record since August 2015, from 48.4, putting an end to the downturn recorded over the past 25 months.
Demand for Egyptian-produced goods and services rose in November and inflows of new work recorded the fastest expansion in 27 months, the survey alluded.
Moreover, foreign demand for Egyptian-produced goods and services levelled up at the fastest pace since the survey began.
“According to anecdotal evidence, the improvement in new export orders was linked to an upturn in demand from neighbouring economies,” the report added.
Non-oil private sector firms boosted their buying activity in response to higher output requirements and in anticipation of further growth.
Furthermore, quantities of purchases increased at a solid rate overall, while pre-production inventories were accumulated at the fastest rate since November 2014.
Meanwhile, job shedding carried on at a marginally slower pace than the prior record, the survey noted, extending the current sequence of declining employment levels to 30 months.
“In terms of inflation, average cost burdens rose at a sharp rate in November,” the report pointed out, adding that “the rate of input price inflation eased and registered below the historical series average.”
Selling prices maintained rising at the slowest rate since February 2016, the report indicated.
“Sentiment towards future growth prospects remained strongly positive in the latest survey, with the respective index reaching a 27-month high in November, partly reflecting optimism towards an expected economic upturn,” the report concluded.
