Egypt: PMI continues to hover just below positive territory in February
March 5, 2018
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) ticked down from 49.9 in January to 49.7 in February, signaling a mild worsening in business conditions in the non-oil private sector. However, the print was only marginally below the 50-threshold which separates expansion from contraction.
February’s slight decrease was a result of a contraction in output. More encouragingly however, new orders returned to growth following two consecutive monthly falls, with stronger demand reported both at home and abroad. Despite fatter order books, firms continued to lay off workers in February, although the rate of job shedding was the slowest since June 2015. Input price inflation eased somewhat but remained elevated, which had a knock-on effect on output prices, which also rose. Firms in the non-oil private sector stayed optimistic in February, thanks to higher investment, an expected economic turnaround and new business; this bodes well for the evolution of the PMI going forward.
Egypt Investment Forecast
Our panelists expect total investment to grow 8.1% in fiscal year 2018 and 8.3% in fiscal year 2019.
Author: Oliver Reynolds, Economist