Operating conditions in Egypt’s non-oil private sector economy fractionally worsened in December, as employment fell and new orders dropped at the softest pace in four months, according to a new survey.
The seasonally adjusted Emirates NBD Egypt Purchasing Managers' Index – a composite indicator designed to give an overview of operating conditions in the non-oil private sector economy – rose from 49.2 in November to 49.6 in December, signalling a softer deterioration in the health of the sector. The index was at a four-month high, moving closer to the 50 mark that separates expansion from contraction.
Purchasing activity, however, grew at the fastest rate since May, but input cost inflation eased even further, setting a record low across the survey history.
The improvement in the headline index was supported by the weakest fall in new orders in the four-month sequence of reduction. While many panellists polled by the survey continued to report poor market conditions, some saw downward pressures fading and demand strengthening. Foreign orders also declined at a slower pace. Output at Egyptian companies, however, contracted at a slightly faster rate in December.
“Encouragingly, purchasing activity expanded at the strongest pace in seven months, as a number of firms scaled up input buying in response to new business gains,” the survey noted.
Employment in the Arab world’s most populous country, declined modestly in December, as job cuts dominated the quarter. Anecdotal evidence pointed to a number of retirements and people leaving for other roles. Despite this, the level of outstanding business grew only fractionally and at the weakest rate in six months, said the survey.