Egypt: PMI moves back towards positive territory in January
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) rose from 48.3 in December to 49.9 in January, signaling broadly stable business conditions in the non-oil private sector. The print was only marginally below the 50-threshold which separates expansion from contraction.
January’s result was driven by a stabilization in both output and new orders compared to the prior month. Positively, new export orders rebounded in January after contracting in the prior month, likely boosted by the weaker pound and robust international demand. However, firms continued to cut back on staff, as has been the case since June 2015, although the rate of job shedding was mild overall. Also, input cost inflation was elevated, as the depreciation of the currency continues to feed through to prices. The prospects for the evolution of the indicator going forwards are positive; firms’ input buying rose at the fastest pace in over three years—a sign of greater expected demand—and companies remained optimistic regarding output over the next year.