Egypt’s non-oil business activity contracts for 20th month in May -PMI

Egyptian non-oil private-sector activity contracted for the 20th consecutive month in May as output and new orders continued to decline, although the cheaper currency helped lift exports, a survey showed on Monday.

The Emirates NBD Egypt Purchasing Managers’ Index (PMI) for the non-oil private sector stood at 47.3 points in May, down from 47.4 points in April, a slight deterioration amid continued economic struggle, the report showed.

Output continued to decline for the 20th month in a row, reaching 46 points in May from 46.2 points a month earlier as demand and economic conditions failed to improve.

New orders also declined, with the index reading at 45.7 points in May compared with 46.3 points a month earlier.

Egypt has been struggling to revive its economy after a 2011 uprising drove away tourists and foreign investors. It floated the Egyptian pound currency in November which helped it secure a $12 billion International Monetary Fund loan programme.

The currency has halved in value since the float, increasing appetite for Egyptian exports.

New export orders rose for the second month in a row, the survey showed, rising to 54.8 points in May from April’s 51 points, the highest reading since the survey began in April 2011.

“Egypt’s private sector appears to be stabilizing, with the PMI largely unchanged from April,” said Khatija Haque, head of MENA Research at Emirates NBD.

“Encouragingly, new exports orders rose at the fastest rate on record in May, suggesting that the sharp devaluation of the pound in November is having a positive impact on exports.”

Source: Reuters