Egypt's PMI falls in April to 47.7

CAIRO – 6 May 2021: IHS Markit Egypt Purchasing Managers’ IndexTM (PMI) recorded 47.7 in April, down from 48 in March, registering the lowest reading since June 2020.

The results revealed a moderate deterioration in the health of the non-oil economy.

According to IHS Markit, one of the main contributors to the PMI, the Output Index, signaled a fifth successive monthly fall in business activity in April, coinciding with a further decline in new business inflows.

“On a positive note, the level of new export orders received by Egyptian firms increased solidly during April, which panellists linked to an improvement in activity across foreign markets. Nevertheless, a drop in total sales meant that overall workloads decreased at the start of the second quarter. This allowed firms to clear backlogs, and employment levels fell at the quickest rate for four months,” it added.

Economist at IHS Markit David Owen said that business activity in the Egyptian non-oil sector was further dampened by weak client orders in April, marking a fifth consecutive month of decline and leading to an additional cut to employment numbers.

Owen added tha price pressures began to accelerate as input costs rose at the quickest rate for 19 months, driven by supply shortages and rising global prices. The uptick contributed to further downward pressure on input purchases, while stocks were depleted for the fourth month in a row.

"On a positive note, there was a renewed increase in new export orders as external client demand picked up. Meanwhile, firms were still confident of a rise in output over the coming 12 months, although the level of sentiment dropped notably from March,” he added.

According to the results, business expectations for future output fell markedly in April, after surging upwards at the end of the first quarter in the wake of acceleration in the COVID-19 vaccine roll-out. “A recent rise in domestic cases and concerns about financial liquidity meant that fewer businesses were optimistic of a rise in output over the next 12 months. The degree of optimism also slipped below the series average.”