Egypt: PMI improves marginally in April, approaches positive territory
May 5, 2015
The HSBC Egypt Purchasing Managers’ Index (PMI) inched up from 49.6 in March to 49.8 in April. The PMI is still below the 50-threshold that separates expansion from contraction in the non-oil producing private sector. However, April’s result is the highest this year and suggests that operating conditions in the manufacturing sector may be on the mend after a disappointing first quarter.
April’s result was driven by the first increase in output in four months, with manufacturers pointing to stronger demand conditions. Moreover, new orders increased for a second straight month in April amid increased contract wins and market stability. New export business rose modestly, but for the first time this year. Purchasing activity rose to a four-month high. Despite these improvements, employment declined for a fifth straight month. In terms of prices, input costs rose more slowly in April compared to previous months.
HSBC analysts noted that, “business conditions in Egypt’s non-oil private sector economy worsened for the fourth month running in April, driven by an ongoing decline in employment. However, with output and new orders growing simultaneously again, it may not be long before the PMI breaches 50.0. On another positive note, cost pressures eased sharply during the month, with the depreciating pound having less of an impact on purchase prices in the latest period.”
Author: Carl Kelly, Economist