Egypt Non-oil Private Sector shrinks for Third month in March; Survey

Egypt’s non-oil private sector shrunk in March for the third month in a row, though at a slower pace than last month’s contraction, with output declining and new orders showing a slight pick up, a corporate survey showed on Sunday.

The HSBC Egypt Purchasing Managers Index showed a reading of 49.6 in March, a milder slowdown than February’s 46.8, but a contraction nonetheless. A reading above 50 indicates expansion and below 50, contraction.

February saw the sharpest contraction since September 2013, and the survey showed many of the same trends continuing to weigh on the economy in March, including a weak currency boosting input costs and subdued demand dampening output and employment.

“Egypt’s non-oil private sector remained in contraction territory in March, continuing the trend observed so far in 2015,” Markit economist Philip Leake said.

“As a result, the outlook for Egypt remains uncertain, with the depreciating pound providing a key source of instability.”

For the fourth straight month, Egypt’s non-oil private sector shed jobs in March, with some survey respondents saying employees had left to search for better opportunities.

New orders picked up slightly in March after two months of contraction, though some respondents mentioned the negative impact of economic and political insecurity on their order books.

Egypt held an investment conference in March which saw tens of billions of dollars of new foreign investment announced, as the government tries to turn around an economy battered by four years of economic and political turmoil.

Source: Reuters