Egypt: Non-oil private sector falls back into contractionary territory in August
The Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, fell to 49.4 in August from 50.3 in July. The PMI therefore dropped below the 50-threshold that separates expansion from contraction.
Output decreased in August, after a slight increase in July, largely due to weaker domestic sales, although new export orders rose for the second consecutive month. More positively, business sentiment improved to the strongest in one-and-a-half years, with most businesses expecting output to increase in the coming 12 months. Improved sentiment helped employment climb in August and end a three-month streak of declines. In terms of operating abilities, businesses found that outstanding work increased in August, despite the fall in output, partly due to liquidity problems; purchasing activity also fell in the month, after expanding strongly in July. Meanwhile, input prices increased sharply in August following July’s government fuel subsidy cuts, while output prices rose at the fastest pace in one year.