Egypt PMI August 2018

Egypt

Egypt: Operating conditions in the non-oil private sector appear ripe for a resurgence in August

September 4, 2018

The Emirates NBD Egypt Purchasing Managers’ Index (PMI) increased to 50.5 in August from 50.3 in July, inching further above the 50-threshold that separates expansion from contraction in the non-oil private sector for the second consecutive month and hitting a nine-month high. Notably, operating conditions have not improved for two months running since September 2015.

Firms reported an increase in new business, from both domestic and foreign sources, in August. Furthermore, output was stable, meaning that it did not decrease for the first time in four months. On the back of heftier order books, businesses raised employment levels at the fastest pace in over eight years and ended a period of 38 consecutive months of job losses. Firms also increased their purchasing activity in August.

On the price front, although input cost inflation moderated in August, it remained high due to increased purchase prices, particularly for fuel, electricity and iron. Labor costs also rose in August. Meanwhile, in line with higher input costs, output prices were raised in August, albeit at a slower pace than in July. Looking ahead, businesses remained optimistic for the coming 12 months in August, although optimism slipped to the lowest since October 2016 due to concerns over rising prices.

Our panelists expect total investment to grow 10.0% in fiscal year 2019, which is 0.4 percentage points down from last month’s forecast, and 8.4% in FY 2020.


Author:, Economist

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Egypt PMI August 2018

Note: Emirates NBD Purchasing Managers’ Index. Readings above 50 indicate an improvement in non-oil business conditions while readings below 50 indicate a deterioration.
Source: Emirates NBD and Markit.


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