Cairo – Mubasher: Egypt’s non-oil private sector has witnessed a slight growth in July, according to a report compiled by IHS Markit for Emirates NBD PJSC.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) increased to 50.3 in July from 49.2 in June, marking the first expansion since April. A reading above 50 indicates expansion, while a reading below that signals contraction.
Output and new orders slightly improved, but employment continued its downtrend, the report indicated.
Panellists attributed higher sales to improved market activity and a rise in export contracts.
“A noticeable factor was an increase in contracts from foreign clients, leading to the first rise in new export orders since August 2018,” economist at IHS Markit, David Owen, said.
Overall input costs leapt on the back of a 30% increase in fuel prices as part of the Egyptian government’s plan to cut subsidies, Owen added, expecting that “the impact on costs will be temporary, with the rate of inflation possibly returning to its relatively low level seen during the first half of 2019.”
Meanwhile, employment continued to fall in July likely on the back of retirements and voluntary leavers.
The report highlighted that sentiment towards future output improved in July as more firms forecast higher market activity and a further increase in the value of the Egyptian pound.
