Egypt: Egypt PMI marches towards recovery in July
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, rose to 49.6 in July from 44.6 in June, marking a further recovery from the 29.7 reading in April, which remains the lowest point 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 easing of coronavirus restrictions underpinned the improvement in July and led to the first increase in output in a year. Moreover, new orders increased as export opportunities improved, leading to slower downturns in employment and inventories. In terms of the outlook, optimism among businesses rose to the highest level in nearly two-and-a-half years.
Commenting on the print, David Owen, economist at IHS Markit, said Egypt still has some way to go to return to pre-COVID levels of activity and demand, with the recent upturns only mild overall. Owen added: “Moreover, job losses remained solid in July, signaling that firms are still trying hard to survive the post-lockdown market environment. This has not been helped by rising cost inflation, nor continued price discounting. The landscape for Egyptian businesses remains both competitive and daunting, but can be improved in the coming months should tourism and other sectors be given a boost.”