Cairo – Mubasher: Egypt’s non-oil private sector has softened its downturn pace in October, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit on Sunday.

The Emirates NBD Purchasing Managers’ Index (PMI) rose to 48.4 in October from 47.4 in September, the report revealed. 

“The headline PMI for Egypt improved in October, although it remains under the neutral 50.0 level,” head of MENA research at Emirates NBD Khatija Haque commented on the Egypt PMI survey.

“Output, new orders and employment declined at a slower rate in October compared with September and new export orders increased on average last month, after declining in September.

“Encouragingly, business optimism in October was the highest in more than two years,” Haque added.

The Egyptian non-oil private sector’s deteriorating business conditions have been recorded in every survey since October 2015, therefore, the most recent contraction was toned down in comparison to the historical average.

The output of the Egyptian non-oil private sector maintained declining in October at a slower pace than in September, the report added.

Panellists reported a further moderate contraction in new orders, while foreign demand grew in October, the survey showed.

“According to anecdotal evidence, weak sales in the domestic market were partly negated by an uptick in export demand from neighbouring economies in the Middle East,” the report highlighted.

At the price level, a downtick in both input and output price inflation have been recorded in October’s survey.

Hence, the average cost burdens the non-oil private sector firms faced carried on rising sharply.

“Data suggested that input cost inflation was primarily driven by higher raw material costs, whilst staff costs rose at a slower, albeit solid pace,” according to the report.

Jobs among Egypt’s non-oil private sector companies continued to shed in October, extending the current sequence of contraction to 29-month.

Meanwhile, anecdotal evidence indicated that firms are not replacing retiring employees, as a result the rate of decline eased in the latest survey.

The recent data suggested a return to lengthening wait times after recording an improvement in delivery times in September.

“Firms commonly linked longer wait times with a lack of capacity at suppliers. Buying activity returned to growth in October, ending a four-month streak of contraction,” the reported noted.

Business confidence in the Egyptian non-oil private sector was greatly positive, as it hit a 26-month high in October.

“Firms reported that rising business investment and forecasts of economic stability underpinned optimism towards future growth prospects,” The report concluded.