Egypt: PMI pulls back in September
October 3, 2017
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell from 48.9 in August to 47.4 in September, thus moving further away from the 50-point threshold that separates contraction from expansion in the non-oil producing private sector. September’s figure puts an end to two consecutive monthly increases, and signals that although signs of a pickup in the economy have been evident so far this year, the economy is not yet out of the woods.
September’s decline was driven by a sharper decline in output. New orders also slipped further in September, on the back of more subdued demand, although the contraction was moderate overall. Despite the boost provided by the weaker pound, new export orders declined for the first time since March, with companies reporting that regional uncertainty hampered demand. Employment in September fell at the fastest rate in eight months, as firms responded to difficult economic conditions by cutting staff. Some good news came on the price side, with input price pressures easing in September. This will be welcome news to firms who have had to deal with elevated price pressures so far this year. Encouragingly, optimism regarding future growth prospects improved in September, which bodes well for the evolution of the indicator going forward.
Author: Oliver Reynolds, Economist