Cairo - Mubasher: Egypt’s non-oil private sector has risen slightly in March amid stable output and increased new orders, marking a seven-month high.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) edged up to 49.9 in March from 48.2 in February, signalling a stable performance of the Egyptian non-oil private sector economy, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.
Egypt’s non-oil, private-sector firms reported an uptick in new orders in March, while demand for Egyptian goods and services increased for the first time in seven months on the back of positive market movement in businesses and rebounded tourism.
“This represents a significant improvement from the 17-month low of 48.2 recorded in February, though the continued negative performance of the private sector reaffirms our decision to downgrade our 2018/19 real GDP growth forecast from 5.5% to 5.3%,” MENA Economist at Emirates NBD Daniel Richards said.
“New orders turned positive in March for the first time since August last year, which in turn saw output contract only marginally,” Richards highlighted.
Meanwhile, new export orders maintain contracting due to a lack of foreign contracts, according to the survey.
The Output Index fell below the 50.0 neutral mark, “as greater activity due to higher sales at a few firms was offset by reduction at others,” the survey added.
“Firms were able to raise output prices for the first time this year, while input prices were at a series-low, reducing pressure on firms’ margins,” Richards indicated.
Employment levels dropped for the sixth month in a row even though some firms have raised their workforce numbers in March, while others reported lower staffing levels due to retirements and people leaving for other companies.
Input price inflation fell last month as price pressures on input purchases decreased, the survey noted.
“Egyptian businesses reacted with a fractional uptick in output charges, ending a two-month sequence of declining prices,” the survey said.
Furthermore, future expectations dipped in March from February’s ten-month high, while some businesses expressed worries that the economy may see inactivity over the coming year. However, the overall sentiment is still positive.
