Cairo – Mubasher: Egypt’s non-oil private sector declined to the weakest rate in two years over the last quarter of 2017, ending the year with a modest deterioration in business conditions, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.

The headline seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell at 48.3 in December 2017 from 50.7 in the preceding survey period.

“Egypt’s PMI reading dipped back below the neutral 50.0 mark once again in December, dashing hopes that the positive November reading signalled a lasting return to expansion in the Egyptian non-oil private sector,” MENA Economist at Emirates NBD Daniel Richards commented.

The latest PMI recorded throughout the final quarter of 2017 was the slowest in over two years and was weaker than the series’ historical average since early-2011, according to the survey.

“Panel members in the non-oil private sector commonly cited a deterioration in inflows of new business from both foreign and domestic markets, with both new export orders and total new business returning to contraction in December,” the survey added.

Meanwhile, job shedding was the slowest in 28 months during December, as it only witnessed a marginal fall in employment.

Cost burdens softened during December and the rate of input price inflation eased to a 22-month low, the report added, pointing out that “selling prices rose at the slowest pace since February 2016 and only marginally overall.”

Stocks of purchases, held by companies operating in the non-oil private sector, dropped at a solid rate in the latest survey period, as firms were forced to utilise existing stocks as a result of input shortages at suppliers, according to anecdotal evidence.

Business confidence towards future growth prospects remained strongly positive overall, despite easing marginally since November, the survey indicated.

“Increased capital expenditure and expected economic stability underpinned optimism during December,” the report concluded.