Egypt: PMI falls into contractionary territory at the start of Q4
November 3, 2015
The Emirates NDB Egypt Purchasing Managers’ Index (PMI) dropped from 50.2 in September to 47.2 in October, falling below the 50-threshold that separates expansion from contraction in the non-oil producing private sector. The index has been hovering close to the neutral 50-mark during the whole year, reflecting persistent weakness in the non-oil private sector economy. October’s result was the weakest since February.
Both output and new orders fell at the fastest pace in eight months due to weak demand and a lack of economic stability at home and abroad. New export orders declined the most in over two years. Moreover, purchasing activity declined after having stabilized in September and employment fell at the fastest pace in six months. Ongoing weakness of the Egyptian pound led to a sharp increase in input costs.
Emirates NBD analysts noted that, “October’s survey suggests that the Egyptian economy has slowed at the start of Q4 2015. Some of the issues that appear to be undermining output in the private sector – including problems with power supplies and the availability of FX – highlight the need to implement a more concerted program of structural reforms to boost the economy’s short and long-term outlook.”
Author: Carl Kelly, Economist