Cairo – Mubasher: Egypt’s non-oil private sector has marked a 13-month low in January as companies reported a decrease in output and overall orders.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell to 48.5 in January from 49.6 in December, indicating “a fifth successive deterioration in business conditions”, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit on Tuesday.
“Egypt’s recovery over the past two years has so far largely been driven by external rebalancing and public investment, while the private sector has remained under pressure, in part as a result of ongoing reforms,” MENA Economist at Emirates NBD Daniel Richards commented.
Egyptian firms reported the fastest decline in output since December 2017 due to a lack of new contracts, resulting in lower new and foreign orders, the survey said.
Meanwhile, non-oil private businesses have remarkably boosted their purchasing activity last month, with the respective index hitting a 12-month high, according to the survey.
Overall stock have seen negative trend despite some firms confirmed higher purchasing levels on lower prices of raw materials, the survey added.
Employment fell marginally in January for the fourth month in a row, while backlogs of work remained the same after marking a six-month high.
Moreover, selling fees declined for the first time in three years last month as weak market conditions forced many firms to offer discounts and costs rose slightly.
Input price eased in January as a result of a drop in oil and raw material prices, while “salary inflation was the least marked for nearly two-and-a-half years”.
Sentiment faded in January to its lowest level since October 2016 as several firms anticipated the output would improve over the next 12 months, but “a lack of exports and uncertainty in the global economy raised doubts for others that activity will expand this year”, the survey concluded.
