Egypt: Egypt PMI continues gradual recovery in June
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, rose to 44.6 in June from 40.7 in May and marked a further recovery from the 29.7 reading in April, which remains the lowest on record since the current survey began in April 2011 and reflected the effects of Egypt’s first full month with strict coronavirus restrictions. Readings below 50 indicate an overall decrease compared to the previous month.
The recent partial lifting of coronavirus restrictions underpinned the improvement in the PMI in June and led to upticks in the output and new orders sub-indices, although both remained below the crucial 50-threshold.
Commenting on the print, David Owen, economist at IHS Markit, said: “Employment numbers still fell at an accelerated rate in June, although multiple signals suggest this will soon change. Higher demand at some companies, increased backlogs and sentiment rising to a six-month high all point to firms hopefully restarting hiring in the near future. Firms sourcing medical equipment and other raw materials saw a sharp uptick in purchases prices in June, which led to a renewed rise in cost burdens across the non-oil private sector. As a result, wages were reduced for the third month in a row.”
In terms of the outlook, optimism among businesses rose to the highest level in 2020 so far, as they noted that the government is looking to relax the coronavirus restrictions even further.