Egypt's PMI records 3rd consecutive monthly improvement

CAIRO – 3 December 2020: IHS Markit Egypt Purchasing Managers’ IndexTM (PMI) posted 50.9 in October, compared to 51.4 in September, recording a third consecutive monthly improvement.

The report said that the recovery in business output - after the downturn caused by the COVID-19 pandemic and associated lockdown measures - lost momentum in the latest survey period, adding that business activity rose for the fifth month running, but the upturn was softer than the 73-month record set in October.

“A slowdown in new business growth was also registered in November. That said, firms continued to report a strong increase in sales overall, mainly due to an improvement in client demand following the easing of lockdown restrictions,” it added.

According to the report, export volumes were up in November, although, as was the case for total sales, the pace of growth softened from the previous month. The slowdown came as some European markets entered into stricter lockdowns to combat a second wave of COVID-19 cases.

"Weaker rises in output and new business suggested a tail-off in the economic recovery in November, although it came after output growth reached its highest in over six years during October. Firms were constrained by a slower increase in export sales, particularly as many countries in Europe tightened lockdown measures to curb a second wave of the virus. Job numbers decreased again, continuing the trend seen for more than a year,” Economist at IHS Markit, David Owen stated.

Owen added that perhaps more encouraging was a joint-record improvement in supplier performance, showing that the second wave in Europe has so far not impacted global supply chains in the same way observed in the spring.

"However, Egyptian firms were also the least optimistic about future output in the series history, amid concerns that activity could weaken if COVID-19 cases rise again domestically."