Egypt’s PMI remains above the series’ long-run average: CE

CAIRO – 5 March 2018: Capital Economics said that Egypt’s PMI for non-oil private sector edged down from 49.9 in January to 49.7 in February, according to a Monday report.

The report said that while this decline left Egypt below the 50-mark, it remained above the series’ long-run average.

It added that the new export orders component further picked up, suggesting that firms are continuing to benefit from a boost to competitiveness from the pound’s 50 percent devaluation against the dollar in late-2016.

Egypt’s exports rose 23 percent, reaching $2.47 billion in December 2017, compared to $2.01 billion in the same month of the previous year.

The Central Agency for Public Mobilization and Statistics attributed the increase of exports to the rise of some commodities’ value as crude oil which rose by 92.3 percent, fertilizers (by 68.1 percent), ready-made garments (by 14.2 percent), and plastics in primary forms "plastics" (by 98.2 percent).

Capital Economics added that last month’s PMI readings for the Gulf suggest that the imposition of austerity measures at the start of this year is still weighing on non-oil sectors in the region, thinking that the impact will start to fade over the coming months as governments ramp up infrastructure spending, providing a boost to activity.

Emirates NBD research said in a report on Monday that this decline refers to the contractionary of the Egyptian non-oil private sector, given that the headline figure was near from neutral 50.0 level which delineates contraction and expansion.

Given that Egypt floated its currency in November 2016 by almost 50 percent against the US dollar as a step towards the economic reforms the country took during this period, followed by the International Monetary Fund’s (IMF) loan.

Egypt received three tranches of IMF loan till now with total disbursements to $6.08 billion, with expectations to take its fourth tranche in April.

The employment index recorded the 33rd consecutive month of job shedding in February, at 49.6, according to NBD research.

The Central Agency for Public Mobilization and Statistics (CAPMAS) said in February that Egypt’s unemployment rate slipped to 11.3 percent in the fourth quarter (Q4) of 2017.