Cairo – Mubasher: Egypt’s non-oil private sector has improved in July, hitting an eight-month high on the back of an increase in new orders and exports.
The headline seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) rose to 50.3 in July from 49.4 in June, according to a recent survey sponsored by Emirates NBD.
“The positive PMI reading [for July] supports our view that real gross domestic product (GDP) growth will strengthen in 2018/2019 as there is a greater recovery in the private sector, supported by gradual monetary policy normalisation, improved political stability and a rebound in the tourism sector,” MENA Economist at Emirates NBD Daniel Richards said.
Egyptian non-oil private sector firms reported a robust volume of new business, backed by higher demand from both domestic and foreign sources, the report added.
Moreover, panel members said that new domestic orders have seen an upturn as inbound tourism improves, while robust global economic scene supported the increase in new exports, the survey showed.
On the other hand, output marked a three-month low due to higher costs and shortages of raw materials that negatively impacted the business activity.
Staffing levels eased in July, whereas both output and employment fell marginally at slower rates than in June, the survey indicated.
Non-oil private sector firms maintained lower purchasing activity, with panel members citing “a lack of liquidity as a key factor behind the reduction,” according to the survey.
The companies’ input costs increased sharply at the beginning of the third quarter as higher fuel costs and energy prices weighed on the marked rise in cost burdens.
Accordingly, selling prices hiked as inflation rate rose for the 11th month in a row, the survey noted. Output growth is projected to remain positive for the next 12 months remained, the report remarked.
“A strong global economic picture alongside the rebound in tourism underpinned positive sentiment. However, the degree of optimism softened from June,” the survey concluded.