Cairo – Mubasher: Egypt’s non-oil private sector witnessed a severe decline in business conditions in April with activity, new business, and exports falling at record rates amid precautionary measures taken to contain the coronavirus (COVID-19) outbreak.

The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index plunged to a historic low of 29.7 in April, compared to 44.2 in March, according to a report on Tuesday. A reading above 50 indicates expansion, while a reading below that signals contraction.

The reading marked a steep fall in business conditions, hitting the lowest level since the series began in April 2011, following a slight contraction at the end of the first quarter of 2020.

"Businesses lucky enough to remain open scaled back activity on a massive scale, as many highlighted sharp falls in domestic sales and foreign demand. Firms forced to close unsurprisingly recorded an even steeper decline in output,” David Owen, an economist at IHS Markit, said.

Employment levels fell at the fastest pace in more than three years “with companies widely linking the reduction to the health measures. Some firms chose to retain workers but lower wages, which drove a slight fall in overall staff costs.”

“The outlook for future activity improved slightly in April, despite large negative shocks to output and demand.”

Businesses expect the economy to open up in the near future, while some firms voiced concerns that the measures against COVID-19 would be extended, leading to a recession.