Activity in Egypt’s non-oil private sector remained in contraction during the month of February, a survey showed on Tuesday, as output fell for the seventh consecutive month, albeit at a slower rate.
IHS Markit’s Purchasing Managers’ Index (PMI) for the non-oil private sector was 47.1 in February, stronger than 46.0 in January but still below the 50.0 threshold that separates growth from contraction.
Sub-indexes for output and new orders, which account for over half the index’s weighting, both improved month-on-month but remained below the 50.0 mark amid “general weakness in demand and soft labour market conditions”.
Both output and new orders registered 46.2 in February, up from January’s readings 43.7 for output and 44.5 for new orders.
“Unfortunately for local businesses, the challenging domestic market conditions are being compounded by weakness in external demand, with export orders continuing to fall sharply in February,” said IHS Markit’s principal economist Phil Smith.
The volume of export orders fell for the fifth consecutive month in February, coming in at 39.4, a slight improvement from 38.5 in January but still one of the fastest rates of decline since data collection began in April 2011, the survey said.
“The outbreak of the coronavirus in China is not only reportedly weighing on export sales, but also dampening business confidence,” Smith said.
Fears about the impact of the coronavirus outbreak sent markets plunging to their worst levels since the depths of the 2008 financial crisis last week, with almost $6 trillion wiped off world stocks.
The head of the World Trade Organization said on Monday that he expected the coronavirus epidemic to have a “substantial” impact on the global economy.