Egypt: The non-oil private sector inches closer to expansion in December
January 10, 2019
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) ticked up to 49.6 in December from 49.2 in November, which represents a four-month high. Despite the uptick, the index was still below the 50-threshold that separates contraction from expansion in the non-oil private sector for the fourth consecutive month.
Driving the PMI higher in December was the highest reading for new orders since August, although new orders did decrease for the fourth-month running. In addition, firms ramped up their purchasing activity in December, with the most buying taking place since May as businesses reported increased operating requirements. On the other hand, output decreased at a faster pace in December than in November and employment declined, while outstanding business grew at the weakest pace in six months. In terms of prices, input cost inflation eased and came in at the lowest recorded in the survey’s history, which stretches back to April 2011. This was primarily because of the softest uptick in purchase prices in more than six years. Output price inflation, meanwhile, accelerated slightly in December. Looking ahead, business sentiment was subdued in December and was the lowest recorded in 26 months, with 76% of companies expected no change or a decline in output in the next 12 months. Only 24% of companies forecast greater output.
Egypt Fixed Investment Forecast
Our panelists expect total investment to grow 10.5% in fiscal year 2019, which is up 0.2 percentage points from last month’s forecast, and 9.9% in FY 2020.
Author: Edward Gardner, Economist