Egypt: PMI falls to nine-month low in March
Egypt’s Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—fell to 48.0 in March from 49.3 in February. The figure marked the fourth sub-50 print in consecutive months, with readings below 50 indicating an overall worsening of operating conditions compared to the previous month.
The drop in the PMI was driven by the sharpest fall in output since June 2020 amid falling demand. Moreover, export sales fell for the first time in three months, while the run of monthly job losses extended to almost a year-and-a-half due to softer capacity pressures.
On the price front, input price inflation softened in March due to weaker input demand, despite a continued rise in purchasing costs. Likewise, output prices rose marginally in the month. Finally, sentiment improved markedly in March on the back of the government’s vaccination drive, fueling hopes of a faster-than-expected return to normality.
Regarding the outlook, David Owen, economist at IHS Markit, commented:
“The outlook for future business activity was more positive, as businesses predicted that economic conditions will start to pick up soon as vaccines feed through to a greater reopening of the economy. The expanding of the vaccine programme to more demographics played a key part in boosting expectations. Hopefully this is a sign of improving demand in the near term and a recovery in output in the second half of the year.”