Cairo – Mubasher: Egypt’s non-oil private sector has returned to expansion in terms of total new orders and the slight increase in new export business in February, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.
The headline seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell to 49.7 points in February 2018, from 49.9 in January, registering above its long-run average, the survey noted.
“Although Egypt’s Emirates NBD Purchasing Managers’ Index remained stubbornly just below the neutral 50.0 mark in February, at 49.7, the data remains upbeat in comparison to recent annual averages,” MENA Economist at Emirates NBD Daniel Richards commented.
New export orders and business optimism were all in positive territory, boosting the view of a strengthening Egyptian economy, Richards noted, forecasting that the headline figure will begin to hover over the 50.0 level in the coming quarters.
The expansion reported by non-oil private sector firms in inflows of new business was only the third recorded over the past two-and-a-half years, the survey added, pointing out that panelists have witnessed a strong demand from both domestic and export markets.
The rate of growth in new business from abroad was at a three-month high in February, the survey said, noting that some panelist observed a higher demand from European markets.
Meanwhile, the output from Egyptian non-oil private sector firms diminished in February, according to the survey.
Job shedding was the lowest since June 2015, while the rate of contraction was only marginal overall, the survey indicated.
Some of the non-oil private sector companies that witnessed a drop in payroll numbers have reported that retiring employees were not replaced, the survey said.
Input price inflation eased in the latest survey and recorded below the historical average, hence, the rate of inflation remained sharp overall.
Numerous firms have reported higher wage bills and raw material costs in February, the survey pointed out.
“Reflecting higher average cost burdens faced by Egyptian non-oil private sector firms, output charges rose at a solid pace during February. The rate of selling price inflation quickened to the fastest since last September,” the survey continued.
The non-oil private sector has maintained strong positive sentiment in February and the overall level of optimism was well above the historical average, the survey highlighted.
“According to anecdotal evidence, higher business investment, an expected economic upturn and new project wins underpinned confidence in the latest survey,” the survey concluded.
