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Egypt’s non-oil private sector slightly drops in October – PMI

Egypt’s non-oil private sector slightly drops in October – PMI
Outlook for business activity improved in October from the three-year low in September

Cairo – Mubasher: Business conditions of Egypt’s non-oil private sector have slightly weakened during October due to lower sales and output. 

Egypt's Purchasing Managers’ Index (PMI) declined to 49.2 in October, above the average of 48.4, from 49.5 in September, according to a recent survey produced by IHS Markit. A reading above 50 indicates expansion, while a reading below that signals contraction.

Sales fell for the third month in a row with new orders from foreign clients also declining for the first time in four months, dragged by weak market conditions that led to a drop in new contracts, David Owen, economist at IHS Markit, remarked.  

New orders retreated marginally, but at the quickest rate since May.

The drop in sales as well as liquidity problems led to the overall decline which contributed “to a further increase in work-in-hand, albeit one that was the slowest since July,” the report indicated.  

 “Labour market conditions have reportedly been slow, although continued hiring activity among surveyed firms suggests a possible improvement in the future,” Owen noted.

Companies slightly reduced input purchases in October, the highest rate since March.

“On the price front, a drop in new orders encouraged Egyptian firms to keep output charge inflation to a minimal, with prices rising to the least extent for four months,” the report added.

Outlook for business activity improved in October from the three-year low in September as 48% of survey respondents projected activity to grow over the next year, as “firms were hopeful of future contracts leading to a rebound in activity.”