Cairo: Business conditions in the Egyptian non-oil private sector declined during May, with marginal declines observed for output and new orders. Meanwhile, purchasing activity remained in expansion territory, with panel members often mentioning that planned business expansions and product developments boosted input buying.
The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the Egyptian private sector.
Commenting on the Egypt PMITM survey, Daniel Richards, MENA Economist at Emirates NBD, said:
“The Emirates NBD Purchasing Managers’ Index for Egypt slipped back below the neutral 50.0 mark in May, after moving to expansion territory in April. Nevertheless, the index continues to hover around the 50.0 mark, a vast improvement on the trends observed prior to the November 2016 reforms, and while the forward-looking data is not quite as positive as it has been in recent months, it continues to point towards an ongoing improvement in the Egyptian economy.”
Key Findings
- Job shedding eases
- Purchasing activity continues to expand
- Input price inflation softens to three-year low
The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index™ (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – fell to 49.2 in May from 50.1 in April. Despite slipping into contraction territory, the headline figure signalled only a marginal deterioration in the health of the sector, with the headline figure remaining above its average.
May data indicated that a decline in new orders formed the basis for the contraction in the Egyptian non-oil private sector, with panel members citing weaker demand. Subsequently, a fall in business activity was reported, following stabilisation in April. Reductions in both output and new business were only marginal, however, and slower than their respective averages.
As has been the case for three years, staffing levels fell further during May. However, job shedding eased to a three-month low with, the rate of decline slower than the average across the survey history.
Elsewhere, non-oil private sector businesses expanded their purchasing activity for the eighth consecutive month during May. Panel members largely attributed the increase to planned business expansions. Moreover, the rate at which buying levels rose accelerated from April to a four-month high. May also saw a contraction in stock levels in the sector, with panellists pointing to product developments as a factor behind the fall.
On the price front, firms continued to increase their average selling prices midway through the second quarter. Moreover, the rate of charge inflation accelerated from April. Cost pressures and the stronger US dollar were key factors behind the rise in output charges, according to respondents.
Overall input prices rose, as has been observed since the inception of the survey. Anecdotal evidence attributed the rise to higher purchase and staff costs. That said, the rate of overall input price inflation softened from April to a three-year low.
Meanwhile, firms remained confident that output would increase over the coming 12 months. Planned business expansions combined with expectations of stronger underlying demand underpinned positive sentiment. However, the degree of optimism eased during May.
-Ends-
The next Egypt PMI Report will be published on July 3rd 2018 at 06:15 (CAIRO) / 04:15 (UTC)
About Emirates NBD
Emirates NBD is a leading banking Group in the region. As at 31st December 2017, total assets were AED 470.4 Billion, (equivalent to approx. USD 128 Billion). The Group has a significant retail banking franchise in the UAE and is a key participant in the global digital banking industry, with over 90 per cent of all financial transactions and requests conducted outside of its branches. The bank was declared the Most Innovative Financial Services Organization of the Year at the 2017 BAI Global Innovation Awards.
The bank currently has 230 branches and 1040 ATMs and SDMs in the UAE and overseas and a large social media following, being the only bank in the Middle East ranked among the top 20 in the ‘Power 100 Social Media Rankings’, compiled by The Financial Brand. It is a major player in the UAE corporate and retail banking arena and has strong Islamic Banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations.
The Group has operations in the UAE, Egypt, the Kingdom of Saudi Arabia, India, Singapore, the United Kingdom and representative offices in China and Indonesia.
The Group is an active participant and supporter of the UAE’s main development and community initiatives, in close alignment with the UAE government’s strategies, including financial literacy and advocacy for inclusion of People with Disabilities under its #Together Limitless platform. Emirates NBD Group is an official premier partner of EXPO 2020. For more information, please visit: www.emiratesnbd.com
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.
IHS Markit is a registered trademark of IHS Markit Ltd and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2018 IHS Markit Ltd. All rights reserved.
The intellectual property rights to the Emirates NBD Saudi Arabia PMI® provided herein are owned by or licensed to IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers’ Index™ and PMI® are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. Emirates NBD use the above marks under licence. IHS Markit is a registered trade mark of IHS Markit Limited and/or its affiliates.
For further information, please contact:
Ibrahim Sowaidan
Senior Vice-President, Head - Group Corporate Affairs
Emirates NBD
Telephone: +971 4 609 4113 / +971 50 6538937
Email: ibrahims@emiratesnbd.com
Shaleen Sukthankar Khatija Haque
ASDA’A Burson-Marsteller; Dubai, UAE Head of MENA Research, Emirates NBD
Tel: +971 50 9547834 Email: KhatijaH@emiratesnbd.com
Email: shaleen.sukthankar@bm.com
Joanna Vickers Sam Teague
Corporate Communications Economist
IHS Markit IHS Markit
Tel: +44-207-260-2234 Tel: +44 1491 4610018
Email: joanna.vickers@ihsmarkit.com Email: sam.teague@ihsmarkit.com
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