CAIRO: Egypt's non-oil private sector activity shrank more slowly in May after turning in its worst performance in a decade the previous month as the coronavirus crisis ravaged businesses, a survey showed on Wednesday.

IHS Markit's Purchasing Managers' Index (PMI) for the non-oil private sector came in at 40.7 last month, up from 29.7 in April but still far below the 50.0 threshold that separates growth from contraction.

The coronavirus has virtually shut down Egyptian tourism, which accounts for about 5% of the economy, with no scheduled flights to Egypt since March 19.

The government began allowing some hotels to reopen at a quarter of their usual capacity in late May if they met strict health and safety protocols. Restaurants and cafes have also been shuttered, and a night-time curfew has been in place since March.

"The outlook for activity in 12 months' time weakened from April, although it remained higher than March's recent low," IHS Markit said. "Businesses were generally hopeful that the eventual passing of the COVID-19 crisis could lead to a rebound in the market."

The new orders sub-index rebounded to 36.1 from 14.1 in April, which was its worst reading in nine years. Purchasing strengthened to 41.9 from 21.0 in April.

"Output and new orders fell again as private sector demand remained broadly stagnant," said IHS Markit economist David Owen. "Export sales were also weak. In addition, job losses accelerated to the quickest pace in over three years."

Output dropped to 40.6 in March from 46.2 in February and new orders to 40.2 from 46.2.

Non-oil sector employment contracted for a seventh straight month with the index at 45.5 compared with 46.1 in April.

"Sentiment was still positive, though concerns arose that the U.S./China relationship is worsening, which could affect any rebound in global demand," Owens said.

(Reporting by Patrick Werr; Editing by Catherine Evans) ((patrick.werr@thomsonreuters.com;))