Egypt’s non-oil private sector activity contracted at a far faster rate in March than in February as the coronavirus-induced economic slowdown spread across the globe, a survey showed on Sunday.
IHS Markit’s Purchasing Managers’ Index (PMI) for the non-oil private sector came in at 44.2 last month, down from 47.1 in February and far below the 50.0 threshold that separates growth from contraction.
It was the sharpest contraction since January 2017, shortly after Egypt put in place austerity measures as part of an IMF-backed economic reform programme signed in November 2016.
“The global economy is notably reeling from the effect of the COVID-19 pandemic ... the Egyptian non-oil private sector was no exception,” said IHS Markit economist David Owen.
IHS Markit said the March survey registered the weakest level of optimism in the series’ history, with confidence falling for a third month in a row, driven by concerns around the pandemic, especially its effect on the tourism industry.
The spread of the novel coronavirus has almost totally shut down Egyptian tourism, which accounts for an estimated 15% of gross domestic product. The last scheduled airline flights to Egypt ended on March 19.
Both output and new orders at Egyptian businesses fell, with output dropping to 40.6 in March from 46.2 in February and new orders to 40.2 from 46.2.
Businesses said they were also hurt by factory closures in China.
A contraction in non-oil sector employment extended for a fifth straight month in March, but at a slightly slower rate. The employment sub-index came in at 47.0 March compared with 46.8 in February.