Egypt: Non-oil private sector PMI increases for first time in three months in December
January 6, 2020
The Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, increased to 48.2 in December from 47.9 in November, indicating a softer deterioration in business conditions in the sector over the previous month.
Supporting the PMI uptick in December were slower rates of decreases in both output and new orders. Moreover, input cost inflation remained cool—as a strong pound against the U.S. dollar contained import price pressures—and consequently allowed businesses to sell goods and services at lower prices for the second successive month. In addition, purchasing activity among firms also increased marginally in December and near-term business confidence improved slightly. However, weighing on the PMI in December was a faster fall in headcounts than in November.
Commenting on December’s reading, David Owen, economist at IHS Markit, said: “The clear positive from the survey is that the strong exchange rate with the US dollar is helping to restrain input costs inflation. Companies have responded with solid reductions in output charges during the past two months, which may help to boost sales in the near future. Upcoming PMI releases will show whether the non-oil sector can be swiftly reinvigorated."
Author: Edward Gardner, Economist