Following an expansion in June, Egypt’s non-oil economy saw weaker conditions in July as output and new orders receded, a business survey showed.
The seasonally-adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) fell from 49.9 in June to 49.1 in July, below the 50.0 neutral mark, as output and demand fell for the seventh time in eight months.
“That said, rates of declines were less marked that those observed between March and May and during the first half of 2020,” the report said.
On the positive side, there was a pick-up in job creation, ending a 20-month run of decline. The jobs market moved into expansion mode in July with data indicating a rise in employment for the first time since October 2019.
Firms made efforts to boost business capacity after a renewed increase in new orders during June. However, demand receded over the latest period as some customers remained reluctant to spend amid the continued impact of the pandemic, the report said.
"Employment growth across the Egyptian non-oil economy in July pointed to an improved confidence that the worst impact of the pandemic is over. Many businesses are now eager to boost capacity, particularly as new order growth recorded in June led to a modest pile-up of outstanding work in the latest survey period,” said David Owen, Economist at IHS Markit.
“With the New Orders Index falling back into negative territory, it is clear that the economic recovery remains fragile and in need of further supportive measures to strengthen demand," he added.
Future business outlook remained strong. More than 51 percent of panellists said that they expect activity to increase over the next 12 months, often citing hopes that the pandemic will end.
(Writing by Brinda Darasha; editing by Seban Scaria)
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