Egypt: Non-oil private sector remains mired in a downturn in February
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, increased to 47.1 in February from 46.0 in January, indicating a less severe deterioration in business conditions—readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease. Reflecting on February’s result, Phil Smith, principal economist at IHS Markit, said Egypt’s non-oil private sector remained “mired in a downturn”.
The softer deterioration of non-oil private sector activity in February was driven by weaker drops in new sales and output of goods and services; however, both declines remained steep by historical standards. Against a backdrop of soft demand, businesses reduced their headcounts and purchasing activity, with staff numbers falling at the quickest pace in nearly two-and-a-half years. On the price front, input cost inflation remained negligible, while output charges were slashed for the fourth consecutive month in an effort to stimulate demand. Turning to the future, non-oil businesses became slightly less upbeat about the 12-month outlook for activity in February due to rising concern about the impact of coronavirus on the Chinese economy.