Egypt: PMI rises in May; remains in contractionary territory for sixth month running
Egypt’s Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—rose to 48.6 in May from 47.7 in April, hitting a three-month high in the process. Nevertheless, the reading marked the sixth sub-50 print in consecutive months, with readings below 50 indicating an overall worsening of operating conditions compared to the previous month.
The rise in the PMI was driven by milder contractions in new orders and output, with both falling at the softest rates since February. Moreover, export sales rose solidly in the month, boosting the overall reading somewhat. On the price front, input price inflation continued to increase in May due to higher raw material costs. As a result, output prices rose in the month, albeit modestly. Finally, sentiment rose in May, with firms notably optimistic for the year ahead amid expectations of improving market conditions in the coming months.
Regarding the print, David Owen, economist at IHS Markit, commented:
“The Egypt PMI remained in contraction territory during May but did improve slightly from April, signalling a slight step towards stability in the non-oil economy. […] Business expectations data offered a glimpse of a positive future, as firms were at their most optimistic since early 2018 and expectant of a strong recovery in business conditions to follow soon.”