Egypt’s non-oil private sector activity saw weaker conditions in July as output and new orders receded, a survey showed on Tuesday.
IHS Markit Egypt Purchasing Managers’ Index (PMI) declined from 49.9 in June to 49.1 in July, below the 50.0 neutral mark, as output and demand dropped for the seventh time in eight months.
“That said, rates of declines were less marked that those observed between March and May and during the first half of 2020,” the survey said.
On the positive side, the survey referred to a pick-up in job creation, ending a 20-month run of decline. The jobs market moved into expansion mode in July with data indicating an increase in employment for the first time since October 2019.
The Egyptian jobs market moved into expansion mode in July, as latest PMI™ survey data indicated a rise in employment for the first time since October 2019. Firms highlighted efforts to boost business capacity after a renewed increase in new orders during June.” the survey read.
Firms made efforts to boost business capacity after a renewed surge in new orders during June. However, demand receded over the latest period as some customers remained reluctant to spend amid the continued impact of the pandemic, it added.
“Employment growth across the Egyptian non-oil economy in July pointed to an improved confidence that the worst impact of the pandemic is over.” David Owen, economist at IHS Markit, said.
“Many businesses are now eager to boost capacity, particularly as new order growth recorded in June led to a modest pile-up of outstanding work in the latest survey period,”
Owen added: “with the New Orders Index falling back into negative territory, it is clear that the economic recovery remains fragile and in need of further supportive measures to strengthen demand,”
Future business outlook remained strong, the survey noted.
More than 51 percent of panellists in the survey indicated that they expect activity to grow over the next 12 months, often citing hopes that the pandemic will end.