Activity in Egypt’s non-oil private sector continued in contraction during February, a survey showed on Tuesday. This was due to the fall in the output for the seventh consecutive month, albeit at a slower rate.
IHS Markit’s Purchasing Managers’ Index (PMI) for the non-oil private sector stood at 47.1 in February, higher than 46.0 in January. Yet it is still below the 50.0 threshold that prevents growth from contraction.
Sub-indexes for output and new orders, which make over half the index’s weighting, both improved month-on-month but still below the 50.0 mark amid “general weakness in demand and soft labour market conditions.”, the survey added.
Both output and new orders rose to 46.2 in February compared with 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,” IHS Markit’s principal economist Phil Smith said.
In February, the volume of export orders dropped for the fifth consecutive month, coming in at 39.4, a margin improvement from 38.5 in January but still one of the fastest rates of fall since data collection started in April 2011, the survey added.
“The outbreak of the coronavirus in China is not only reportedly weighing on export sales, but also dampening business confidence,” Smith explained.
Source: Reuters
