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Egypt's private sector growth softens in November on COVID-19 concerns

Egypt's private sector growth softens in November on COVID-19 concerns
Egypt’s PMI declined to 50.9 in November

Cairo – Mubasher: The Egyptian non-oil private sector activity continued to recover output and new business in November, but consumer confidence hit a historic low amid growing concerns over a second wave of coronavirus (COVID-19), a survey showed on Thursday.

The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index declined to 50.9 in November, slightly up from the neutral 50.0 for the third month in a row, compared to 51.4 in October. A reading above 50 indicates expansion, while a reading below that signals contraction.

The report revealed that growth in both output and new business slowed down since the beginning of the fourth quarter (Q4) of 2020.

"Weaker rises in output and new business suggested a tail-off in the economic recovery in November, although it came after output growth reached its highest in over six years during October," IHS Markit economist David Owen said.

Stricter coronavirus lockdown measures in Europe led to slower growth in export sales.

In addition, the job numbers dropped again to continue its downward trend for more than a year.

"Perhaps more encouraging was a joint-record improvement in supplier performance, showing that the second wave in Europe has so far not impacted global supply chains in the same way observed in the spring,” Owen pointed out.

"However, Egyptian firms were also the least optimistic about future output in the series history, amid concerns that activity could weaken if COVID-19 cases rise again domestically."

Confidence regarding business activity over the next year dropped to a record low as 12% of panellists expected growth.