Egypt: PMI in contractionary territory for fifth month running in April
Egypt’s Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—inched down to 47.7 in April from 48.0 in March, hitting a 10-month low in the process. The figure marked the fifth 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 continued fall in output and new business inflows, amid generally weaker market conditions. Moreover, a drop in total sales in April saw backlogs fall, in turn driving employment levels lower at the quickest pace in four months.
On the price front, input price inflation rose at the fastest pace in over a year-and-a-half in April due to higher raw material costs. As a result, output prices rose sharply in the month. Finally, sentiment fell markedly in April on the back of a recent uptick in domestic Covid-19 cases and concerns about financial liquidity.
Regarding the print, David Owen, economist at IHS Markit, commented:
“On a positive note, there was a renewed increase in new export orders as external client demand picked up. Meanwhile, firms were still confident of a rise in output over the coming 12 months, although the level of sentiment dropped notably from March.”