Egypt: PMI points to softer contraction in July
August 3, 2016
The Emirates NDB Egypt Purchasing Managers’ Index (PMI) rose from June’s 47.5 to 48.9 in July. While July’s result still pointed to contraction in Egypt’s non-oil producing private sector, it marks the highest reading since the index fell below the 50-threshold, that separates contraction from expansion, in October 2015.
July’s improvement was driven by softer contractions in output and new business. Conversely, exports recorded a steep decline and jobs were cut at faster pace than in June. Input prices and output costs continued on their upward trend in July, driven up by March’s currency devaluation.
Jean-Paul Pigat, Senior Economist at Emirates NBD, commented on the economy, “although the PMI is still pointing to weakness in Egypt’s private sector, some consolation can be found in July’s report as the pace of contraction is starting to ease. Addressing the FX liquidity shortage will be key to seeing a further stabilization in the PMI in H2.”