Egypt's non-oil business sector activity falls slightly in Feb: PMI

Egyptian exports have gained new markets since the central bank liberalized the exchange rate in November 2016

  
An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.

An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.

REUTERS/Mohamed Abd El Ghany

CAIRO: Egypt's non-oil private sector business activity contracted again in February although an expansion in new orders suggested a pick up may be on the way, a survey showed on Monday.

The Emirates NBD Egypt Purchasing Managers' Index (PMI) for the non-oil private sector fell to 49.7 from January's reading of 49.9, still below the 50 mark that separates growth from contraction.

"Although Egypt's Emirates NBD Purchasing Managers' Index remained stubbornly just below the neutral 50.0 mark in February, at 49.7, the data remains upbeat in comparison to recent annual averages," said Daniel Richards, MENA Economist at Emirates NBD.

"In particular, new orders, new export orders, and business optimism were all in positive territory, supporting our view of a strengthening Egyptian economy."

The new orders sub-index was 50.3, ending two months of contraction as demand for locally made goods rose.

Egyptian exports have gained new markets since the central bank liberalized the exchange rate in November 2016 as part of a $12 billion International Monetary Fund reform programme. The pound lost half its value after the float.

Non-oil business activity grew for the first time in 25 months in November, with a similar survey attributing the growth to the IMF-linked reforms.

The economy has been struggling to recover since a 2011 uprising scared tourists and investors away, two main sources of foreign currency.

The recent reforms have hit Egyptians hard, however, affecting purchasing power with a much weaker Egyptian pound.

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(Reporting by Nadine Awadalla Editing by Catherine Evans) ((Nadine.Awadalla@thomsonreuters.com;))

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