Emirates NBD and IHS Markit report “modest” deterioration in business conditions
Egypt’s non-oil economy declines on lower output and new orders
Business conditions in Egypt’s non-oil private sector declined for the second month in a row in October, due to decreases in output and new orders, according to the latest survey from Dubai-based lender Emirates NBD and IHS Markit.
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 – fell fractionally to 48.6 in October from 48.7 in September.
The latest reading indicated “a slightly quicker, but still modest, deterioration in business conditions at Egyptian non-oil private sector companies”, Emirates NBD said.
Output growth and new orders fell in October, although the rates of decline were weaker than those seen in September, according to the survey. Foreign demand also fell, albeit at a marginal rate. Businesses surveyed reported challenging market conditions, with overall business activity contracting across Egypt’s non-oil private sector last month and employment levels dropping.
However, output prices rose at the slowest rate in 10 months, reflecting in part an easing in the rate of input price inflation, as well as a rise in raw material costs, petrol prices and staff wages, according to the survey.
Despite the decline in output, businesses increased purchasing activity in October after a modest drop in September, and firms remained confident that output would rise over the coming year.
Almost one-third of businesses said they expected activity to expand, with some forecasting a rise in contracts and investment over the next 12 months.