Cairo – Mubasher: Egypt’s non-oil private sector eased in October amid contracting output price inflation and a modest deterioration in the companies’ business conditions.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell marginally to 48.6 in October from 48.7 in September, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.
“This is the second consecutive month of contraction for the index after having enjoyed a brief period in expansionary 50-plus territory in July and August. It is also the lowest reading of 2018, and the data suggests that private sector firms remain under pressure as Egypt’s IMF-sponsored economic reform programme continues,” MENA Economist at Emirates NBD Daniel Richards commented.
The sector’s downturn has weighed on new orders during October, and foreign demand also fell slightly, according to the survey.
Business activity slashed at Egypt’s non-oil private companies as output retreated for the second consecutive month due to a lack in market demand, the survey said.
Employment fell last month, signaling the fastest rate of job shedding since March as numerous employees leaving for new positions.
Meanwhile, work backlogs marked a four-month high in October, even the growth was marginal, the survey added.
Output charges at firms rose in October at the weakest rate in ten months due to “a softer rate of input price inflation”, as well as an increase in raw material costs, gasoline prices, and staff wages, it said.
“Egyptian non-oil private sector firms remained confident that output would rise over the coming year. Almost one-third of businesses expected activity to expand, with some forecasting increases in contracts and investment over the next 12 months,” the survey concluded.
