Egyptian non-oil private sector hits 48.2 in February: PMI

CAIRO – 5 March 2019: Egypt’s Emirates NBD Purchasing Managers’ Index (PMI) for the non-oil private sector declined to 48.2 in February, recording the lowest level in 17 months, compared to 48.5 in January.

“The index has remained stubbornly in sub-50.0, contractionary territory for six months now, and while we continue to expect an improvement in conditions over the course of 2019, Egyptian firms clearly remain under pressure,” MENA Economist Emirates NBD Daniel Marc Richards stated.

Richards added in a report that output also fell at the fastest rate since September 2017, with survey respondents attributing this to cash flow issues and poor weather conditions. “Egypt has been troubled by sandstorms which have disrupted transport.”




According to the survey, new orders also looked fairly weak, falling at the fastest pace since June 2017.

“They would likely have been even weaker if not for price discounting undertaken by firms, which slashed output prices for the second month running. This is reinforced by the fact that export orders fell at an even more rapid pace than total new orders, with the weakest reading since October 2016, just prior to the removal of the pound’s peg to the dollar the following month,” the report elaborated.

He continued that: “While services exports and remittances inflows have seen substantial growth since the rapid depreciation of the pound in late 2016, goods exports have to date failed to deliver.”

He added in the report that although input prices are expanding at a comparatively slow pace compared to series averages, they nevertheless remain solidly over 50.0, commenting that cost-saving is being achieved elsewhere, with employment reduced for the fifth month in a row, and staff costs falling for the first time since April 2015.

Although conditions are difficult presently, over 44 percent of respondents expect output to be higher in 12 months’ time, sharing our expectation that economic conditions will become steadily more favorable over 2019, the report stated.

Richard expected that interest rate cut enacted by the central bank on Feb. 14, which is the first since March 2018, should help stimulate some private sector demand, which has lagged public investment in driving Egypt’s growth recovery over the past two years.
In January, Egypt’s Emirates NBD Purchasing Managers’ Index (PMI) for the non-oil private sector fell to 48.5, compared to 49.6 in December.

The survey, sponsored by Emirates NBD and produced by IHS Markit, contains data collected from a monthly survey on business conditions in the Egyptian private sector.

Egyptian non-oil private sector records 48.5 in January: PMI

CAIRO - 5 February 2019: Egypt's Emirates NBD Purchasing Managers' Index (PMI) for the non-oil private sector fell to 48.5 in January, compared to 49.6 in December, recording the lowest level since December 2017.