Egypt’s PMI slightly down in August; business activity rises for 2nd month in row

Egypt’s non-oil private sector economy witnessed a growth in activity and demand in August for the second consecutive month, while Egypt Purchasing Managers’ Index inched down to 49.4 in August,

The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index inched down to 49.4 in August from 49.6 in July, slightly down from the neutral 50.0, according to a report on Thursday. A reading above 50 indicates expansion, while a reading below that signals contraction.

Jobs continued to fall, leading to an overall deterioration in business conditions, while output prices increased for the first time in 10 months amid a rise in input prices.

“Many firms are still finding business conditions tough, despite the relaxation of many COVID-19 related restrictions,” David Owen, an economist at IHS Markit, said.

The headline index has levelled up by about 20 points from its nadir in April at the height of the pandemic, suggesting that the downturn has remarkably slowed down.

“Consumer demand remains weak, with new business picking up at only tentative rates in both July and August. As a result, employment levels were not sustained, with firms reporting a strong cut to workforce numbers,” Owen noted.

Sentiment regarding output for the next 12 months sank to the lowest level in three months from July’s 29-month high. However, more companies expect activity to improve than fall, hoping that the pandemic would have a weaker impact on economy activity.