Cairo – Mubasher: Egypt’s non-oil private sector was predominantly stable in January 2018, 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) rose to 49.9 in January from 48.3 in December.
“While Egypt’s headline PMI reading remained just shy of the 50.0 neutral mark in January, the signs are encouraging as we begin 2018. A pick-up in new export orders in particular stands as an indication that the difficult economic reforms enacted in late 2016 are starting to pay off,” MENA Economist at Emirates NBD Daniel Richards commented.
The headline PMI reading reflects that business conditions across Egypt’s non-oil private sector were broadly stable in terms of new business and output, the report added.
Companies that registered lower new orders and output reported unfavourable economic conditions, while companies that recorded increases revealed new client wins, the report noted.
Meanwhile, Egypt’s non-oil private sector has witnessed expansion in new export orders during January and Egyptian goods and services have seen a stronger demand from international markets, on which new export orders have increased recently.
Staffing levels fell during January since June 2015 as the pace of job shedding was marginal and slower than the series trend, the report mentioned.
“Private sector firms continued to face higher input costs. Despite accelerating to a three-month high, inflation remained below the series trend. According to anecdotal evidence, currency weakness contributed to greater cost pressures,” according to the report.
Companies were motivated to engage in purchasing activity at the beginning of 2018 amid reports of expected improvements in demand.
Moreover, expansion rate accelerated to the strongest since August 2014 and was marked overall, while input stocks declined, albeit fractionally.
“Companies retained optimism towards the 12-month outlook for output. Furthermore, the degree of positive sentiment was stronger than the series average. Anticipated improvements in demand conditions and market stability were cited as the key factors behind optimism,” the report concluded.
