Egypt: PMI remains in contractionary territory in June
July 10, 2016
The Emirates NDB Egypt Purchasing Managers’ Index (PMI) decreased marginally from May’s 47.6 to 47.5 in June. The PMI index has been below the 50-threshold that separates contraction from expansion in the non-oil producing private sector since October 2015.
June’s setback mainly reflected stronger contractions in output and new orders than in the previous month due to weaker domestic and international demand. According to the survey record, new export orders suffered particularly from the recent EgyptAir incident and persistent uncertainty surrounding the exchange rate. Elevated inflation likely also contributed to the decrease in new business. Input prices registered a record increase and output charges also rose.
Jean-Paul Pigat, Senior Economist at Emirates NBD, commented on the economy at the end of the fiscal year, “June’s survey suggests the Egyptian economy continued to slow at the end of FY2015/16, with the tourism sector appearing particularly weak. As we start the new fiscal year in July, hopes for a stronger recovery will depend in large part on whether a solution to the ongoing FX liquidity crunch can be found in the near term.”