A factory employee works in a thread spinning factory in Cairo, Egypt, July 5, 2018 (Photo: Reuters)
The contraction in Egypt’s non-oil private-sector slowed in December for the first time in three months, suggesting an easing of a downturn that began in August, a survey showed on Monday.
The IHS Markit Egypt Purchasing Managers’ Index (PMI) rose to 48.2, up from 47.9 in November but staying below the 50.0 threshold that separates growth from contraction.
“Companies reported further declines in both output and new orders, with panellists noting that market conditions remained subdued in general at the end of the year,” the survey said.
Output edged up to 47.1 from 46.6, with some firms mentioning that liquidity issues restricted business activity. New orders stood at 47.9, extending a run of contraction to five months, though it was up from November’s reading of 47.0.
“Despite contracting further, both output and new orders fell at softer rates than in November. This indicates that the downturn in the non-oil sector is beginning to ease,” said David Owen, an economist at IHS Markit.
“That said, headwinds remain on the external front, with new export orders falling at the steepest rate in over three years.”
Job losses were reported at their fastest rate since May.
It remained to be seen whether lower inflation in input costs due to the strengthening of Egypt’s pound against the dollar could lead to a reinvigoration of the non-oil sector, Owen said.
The Egyptian pound traded stronger than 16 pounds to the dollar in December for the first time since February 2017.
The annual headline inflation rate rose to 3.6% in November, but remained well below previous levels.