Non-oil private sector economy contracts further as employment and new orders fell

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 accurate 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 new record low across the survey history.

The improvement in the headline index was supported by the weakest fall in new orders in the current 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 firms, however, contracted at a slightly faster rate in December.