Cairo - Mubasher: Egypt’s non-oil private-sector growth eased in February amid moderate deterioration, marking a 17-month low.

The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) fell to 48.2 in February from 48.5 in January, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit. A reading above 50 indicates expansion, while a reading below that signals contraction.

“The index has remained stubbornly in sub-50.0, contractionary territory for six months now, and while we continue to expect an improvement in conditions over the course of 2019, Egyptian firms clearly remain under pressure,” MENA Economist at Emirates NBD Daniel Richards commented.

Egyptian non-oil private firms reported a drop in new orders in February due to weak market conditions and low exports, the survey said.

Total sales marked a 20-month contraction as foreign demand fell to the lowest level last month since October 2016, the survey added.

Business activity contracted in February, marking a six-month low with “weak sales, poor weather conditions, and a lack of liquidity”, according to the survey.

Purchases quantities eased for the first time in five months, while stock levels were fixed, it indicated.

The survey also highlighted that employment at Egyptian firms fell marginally in the second month of 2019 as employees left for new jobs or retiring.

“Nevertheless, firms continued to manage their backlogs, with outstanding business broadly unchanged. Meanwhile, lead times increased slightly,” the survey said.

Selling fees softened for the second month in a row on the back of weakening market conditions that pushed firms to offer discounts, it added.

However, input price inflation accelerated slightly in February from January as panelists reported rising transport, raw material, electricity, and water prices.

“Despite challenging operating conditions, businesses were upbeat towards the outlook for output in February,” the survey noted.

Moreover, overall sentiment increased to a ten-month high and 44% of firms projecting conditions to improve over the coming 12 months, while some highlighted the importance of planned business development in boosting confidence.