Egypt's PMI records 48.2 during December

CAIRO – 6 January 2021: IHS Markit Egypt Purchasing Managers’ IndexTM (PMI) posted 48.2 in December, compared to 50.9 in November, recording a third consecutive monthly improvement.

The report revealed that the Egyptian non-oil businesses saw a renewed decline in operating conditions at the end of 2020, reflecting solid falls in both output and new orders as rising coronavirus disease 2019 (COVID- 19) cases sparked a reduction in client demand. Notably, the downturn led to a build-up of excess inputs, with inventories rising at the strongest rate since June 2012.

It added that employment cuts meanwhile accelerated to the fastest seen in four months, although increased hopes surrounding COVID-19 vaccines meant firms were more optimistic of a recovery during 2021.

"The latest PMI data pointed to a downturn in the Egyptian non-oil economy at the end of the year, reflecting a slightly depressed market environment as domestic COVID-19 cases rose again. Fears of a 'second wave' of the pandemic and renewed lockdown measures meant some businesses held off from completing new orders in December, despite increased optimism for the future as COVID-19 vaccines begin to be distributed around the world,” Economist at HIS Markit David Owen commented.

Owen added that the decline in sales was a surprise to those firms that made additional purchases earlier in the fourth quarter, as stocks of unused inputs built up at the quickest rate since mid-2012. Purchasing activity was subsequently reduced sharply, while job numbers fell at the strongest rate since August.