Egypt: PMI rises slightly, still indicates marginal deterioration in conditions in February
March 3, 2021
Egypt’s Purchasing Managers’ Index (PMI)—which measures business activity in the non-oil private sector—rose to 49.3 in February from 48.7 in January. The figure marked the third sub-50 print in consecutive months, with readings below 50 indicating an overall decrease in operating conditions compared to the previous month.
The rise in the PMI reflected softer falls in output and new orders, as domestic markets recovered slightly in the month. Moreover, the improvement was aided by the sharpest growth in exports in 10 years amid a slight improvement in tourism activity. On the price front, input costs rose at a solid pace, with higher costs being partially passed onto customers as output prices rose, albeit at the softest pace in seven months. Finally, sentiment worsened in February, although nearly 30% of businesses still expect output to expand over the coming year.
Regarding the outlook, David Owen, economist at IHS Markit, commented:
“Employment fell at a slower rate in February, as some firms expanded their staffing levels to account for an increase in workloads. Alongside business sentiment data, this gives promising signs for an expansion in output as the impact of the COVID-19 pandemic subsides, though panelist comments suggested that some businesses may fail before the economy makes a full recovery."
Author: Stephen Vogado, Economist