Cairo – Mubasher: The Egyptian non-oil private sector deteriorated at a faster pace early 2020 with a decline in sales and a strong drop in business activity, according to a report produced by IHS Markit. 

Egypt's Purchasing Managers’ Index (PMI) fell to 46 in January, the lowest level in 34 months, compared to 48.2 in December 2019.  

A reading above 50 indicates expansion, while a reading below that signals contraction.

“Firms squarely linked this to falling sales, with customers increasingly cautious about their expenditure and new contracts dwindling,” David Owen, an economist at IHS Markit, noted.

Output and new orders fell at the fastest rate in about three years. Moreover, export demand slowed for the fourth month in a row.

“Employment at Egyptian non-oil businesses declined for the third month running, as several panellists saw employees leaving during the month for other job opportunities. Many of those firms chose not to replace these workers, as weaker sales reduced labour requirements,” according to the report.

Lower demand for input costs curbed cost inflation in January as suppliers kept purchase prices unchanged for the first time in the series history. 

Accordingly, restricted cost pressures allowed companies to offer discounts for the third consecutive month.

“As such, business expectations remained positive, despite dropping to a four-month low, as respondents hoped that lower prices would drive sales and activity higher in the coming months,” Owen pointed out.