Egypt: Non-oil private sector PMI plunges in January
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, dropped to 46.0 in January from 48.2 in December, indicating a worse deterioration in business conditions in the sector over the previous month and the lowest reading in over two and a half years.
Contributing to the downturn in January was the fastest contraction in output among Egyptian businesses in three years, which was largely due to a sharp fall in new orders, partly due to softer export demand for the fourth consecutive month. As a result, purchasing activity among firms dropped at the quickest pace in just over two years, hampering stock levels. In terms of prices, input costs were depressed in January, which, in turn, allowed businesses to cut selling prices for the third month running. Employment, meanwhile, dropped among non-oil firms for the third consecutive month. Turning to the outlook, businesses became slightly less upbeat about activity prospects in January.
Commenting on this latest reading, David Owen, economist at IHS Markit, said: “January PMI data brought unwelcome news for Egypt’s non-oil private sector. The headline index posted 46.0, the lowest in 34 months, indicating a solid deterioration in operating conditions. Firms squarely linked this to falling sales, with customers increasingly cautious about their expenditure and new contracts dwindling. This led to softer output, reduced employment and a marked drop in overall purchases”.