Egypt's PMI records 49.1 in July

CAIRO – 3 August 2021: IHS Markit Egypt Purchasing Managers’ IndexTM (PMI) declined to 49.1 in July, down from 49.9 in June.

The latest reading pointed to a slight deterioration in the health of the non-oil sector, and one that was softer than the series trend.

According to PMI™ survey data, the Egyptian jobs market moved into expansion mode in July, as the data indicated a rise in employment for the first time since October 2019. Firms highlighted efforts to boost business capacity after a renewed increase in new orders during June.

However, demand receded over the latest period as some customers remained reluctant to spend amid the continued impact of the pandemic. Meanwhile, the influence of rising raw material prices, fuel costs and employee wages on cost pressures lessened in July, as the rate of input price inflation eased to a four-month low.

"Employment growth across the Egyptian non-oil economy in July pointed to an improved confidence that the worst impact of the pandemic is over. Many businesses are now eager to boost capacity, particularly as new order growth recorded in June led to a modest pile-up of outstanding work in the latest survey period,” Economist at IHS Markit, David Owen, said.

Owen added that with the New Orders Index falling back into negative territory, it is clear that the economic recovery remains fragile and in need of further supportive measures to strengthen demand.

The data showed that both the Output and New Orders Indices fell back below the 50.0 neutral mark in July, as output and demand fell for the seventh time in eight months. This means that rates of declines were less marked that those observed between March and May and during the first half of 2020.

“Weaker demand conditions were linked by survey panellists to a drop-off in domestic spending as clients remained hesitant due to ongoing COVID-19 measures. On the flip side, businesses were helped by a sustained and solid increase in orders from foreign clients, as global economic conditions continued to improve,” it added.