Egypt: Egypt PMI rebounds in May but remains in contraction territory
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, rebounded to 40.7 in May from 29.7 in April, which had marked the lowest reading since the current survey began in April 2011 and reflected the effects of Egypt’s first full month with new social distancing measures in place aimed at reducing the spread of coronavirus. Readings below 50 indicate an overall decrease compared to the previous month.
Commenting on the PMI reading, David Owen, economist at IHS Markit, said: “The Egypt PMI rose 11 points to 40.7 in May, which, while signaling that the worst of the economic hit from the Covid-19 crisis may have passed, still pointed to weaker business conditions since April. Output and new orders fell again as private sector demand remained broadly stagnant. Export sales were also weak. In addition, job losses accelerated to the quickest pace in over three years.”
In terms of prices, input prices increased only modestly in May, while output charges fell for the seventh month running. On the outlook, Owen reflected: “Sentiment was still positive, though concerns arose that the US/China relationship is worsening, which could affect any rebound in global demand.”