Egypt: PMI remains slightly below positive territory in March
April 3, 2018
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) ticked down from 49.7 in February to 49.2 in March, signaling a mild worsening in business conditions in the non-oil private sector. However, the print was above the series’ long-run average, and only marginally below the 50-threshold which separates expansion from contraction.
March’s slight decrease was a result of flat new orders, following new order growth in February, and an acceleration in job shedding. On the positive side, new export orders grew for the third straight month, likely aided by the weaker pound, while the contraction in output moderated. In addition, price pressures eased considerably, with average cost burdens rising at the slowest rate in over two years, as the impact of government reform measures ebbed. However, despite remaining positive overall, business sentiment slid to an eight-month low.
According to Daniel Richards, MENA Economist at Emirates NBD, “While we still anticipate an improvement in the Egyptian economy this year as the negative effects of its IMF-sponsored reforms pass through, the latest PMI data implies that this is taking longer than the authorities might have hoped. Nevertheless, the index has consistently threatened to turn expansionary over recent readings, which is a vast improvement on the months just prior to the economic reforms.”
Author: Oliver Reynolds, Economist