Egypt: PMI drops slightly into contractionary territory in December
January 5, 2021
Egypt’s Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—sank to 48.2 in December from 50.9 in November. The figure marked the first sub-50 print in four months, with readings below 50 indicating an overall decrease in operating conditions compared to the previous month.
The drop in the PMI was predominantly driven by solid falls in output and new orders as rising coronavirus cases both domestically and abroad sparked a reduction in client demand. Furthermore, firms cut employment levels fell for the 14th straight month, although the pace of the decline was moderate. On the price front, input costs rose again on the back of higher raw material costs, with higher output prices being charged as a result.
Regarding this month’s print, David Owen, economist at IHS Markit, commented:
“The latest PMI data pointed to a downturn in the Egyptian non-oil economy at the end of the year, reflecting a slightly depressed market environment as domestic Covid-19 cases rose again. Fears of a 'second wave' of the pandemic and renewed lockdown measures meant some businesses held off from completing new orders in December, despite increased optimism for the future as Covid-19 vaccines begin to be distributed around the world.”
Author: Stephen Vogado, Economist