Egypt: Non-oil private sector jumps into expansionary territory in July
August 5, 2019
The Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, rose to 50.3 in July from 49.2 in June. The PMI therefore climbed above the 50-threshold that separates expansion from contraction for the first time in three months; this got the new fiscal year, which started in July, off to a good start.
Output increased slightly for the first time in three months in July, boosting the overall PMI reading. This was partly due to the first increase in new business from abroad for the first time since last August, and at the fastest pace since November 2017. Following a slight reduction in June, firms ramped up purchasing activity in July at the quickest pace in six months. On the employment front, headcounts continued to decline in July, but the pace of reductions remained modest. Regarding the outlook, businesses were more optimistic about output levels in July than in June.
In terms of prices, input cost inflation accelerated to the quickest pace in nine months, primarily due to government fuel subsidy cuts, while output prices increased.
Author: Edward Gardner, Economist