Cairo – Mubasher: The Egyptian non-oil private sector shrank again in June but at a softer pace with output and new orders rising to four-month highs.

The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index increased to 44.6 in June, compared to 40.7 in May, according to a report on Monday. A reading above 50 indicates expansion, while a reading below that signals contraction.

Lifting some restrictions put in place due to coronavirus (COVID-19) helped many companies record a rise in working hours and new contracts from clients.

However, companies were still cutting jobs and adjusting salaries which led to reducing staff costs for the third successive month.

“Higher demand at some companies, increased backlogs and sentiment rising to a six-month high all point to firms hopefully restarting hiring in the near future,” David Owen, an economist at IHS Markit, said.

"Firms sourcing medical equipment and other raw materials saw a sharp uptick in purchase prices in June, which led to a renewed rise in cost burdens across the non-oil private sector," Owen pointed out.

The outlook for activity was at the highest in 2020 as companies hoped COVID-19 restrictions would ease further in the coming period.