Egypt’s PMI falls to 29.7 in April

CAIRO – 6 May 2020: IHS Markit Egypt Purchasing Managers’ Index (PMI) fell considerably from 44.2 in March to 29.7 in April, marking the lowest figure recorded since the series began in April 2011.

According to IHS Markit, the Egypt PMI fell dramatically in April, with activity, new business and exports declining at record rates amid measures to ease the coronavirus disease 2019 (COVID-19) crisis. Business output was severely limited, leading firms to enact large cost- cutting strategies including weaker input spending and job reductions. As a result, input costs rose at the softest pace ever seen in the survey.

"The Egypt PMI sunk to an historic low of 29.7 in April, as the country faced the first full month of measures restricting activity and movement in the wake of the COVID-19 pandemic,” Economist at IHS Markit David Owen said Tuesday.

Owen noted that businesses lucky enough to remain open scaled back activity on a massive scale, as many highlighted sharp falls in domestic sales and foreign demand. Firms forced to close unsurprisingly recorded an even steeper decline in output.

"Employment levels dropped again in April, although the rate of decline was much softer than for activity. An extended period of weaker output may lead to larger job reductions in the future,” he added, pointing that business expectations remain strong though, in fact improving since March, which may suggest firms will look to retain workforces for when the economy reopens. The outlook may darken though should the crisis worsen and measures are extended.