Egypt: PMI returns to expansionary territory, rises to eight-month high in August
September 3, 2015
The Emirates NDB Egypt Purchasing Managers’ Index (PMI) climbed from 49.2 in July to 51.2 in August, rising above the 50-threshold that separates expansion from contraction in the non-oil producing private sector. August’s result marked the highest reading since December of last year and suggests that the manufacturing sector may be poised for a recovery.
Renewed expansions in both output and new orders drove the positive result. Output increased at the fastest pace in nearly a year and while growth of new work increased, new orders from abroad declined. Higher requirements led to a rise in purchasing activity but did not stimulate new employment, with job creation falling for a third straight month.
Emirates NBD analysts noted that, “the improvement in the August survey is encouraging, and more than reverses the decline seen in the previous month. The rise in the Output component to an 11-month high was particularly notable, and hopefully suggests that the slowdown witnessed in July will not persist through H2. With export activity softening, domestic demand is likely to be the main driver of growth in the near term.”
Author: Carl Kelly, Economist