Cairo – Mubasher: Egypt's non-oil private sector activity contracted for the 10th consecutive month in September, although confidence towards future business activity over the next 12 months hit a record high level, according to a survey.
The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index declined to a four-month low of 48.9 in September, compared to 49.8 in August, according to a report on Tuesday. A reading above 50 indicates expansion, while a reading below that signals contraction.
However, Egyptian firms voiced optimism that the economy will recover from the COVID-19 pandemic over the coming 12 months.
Output and new orders slightly dropped during September due to a decline in customer demand and weak economic conditions. Sales to foreign customers plunged for the first time since March.
"While the latest PMI data pointed to non-oil output and new orders declining at the end of the third quarter, these reductions were only slight, while the two indices remained above their long-run averages for the fifth month in a row," David Owen, an economist at IHS Markit, said.
Amid growing confidence, employment numbers grew for the third month in a row during September.
Lower inventory levels led companies to make more purchases to avoid raw material shortages and limit the impact of future cost inflation.
"Moreover, confidence towards future activity soared to a record high in the series nine-year history. The rise coincided with a faster vaccination programme in Egypt and a further relaxation of travel measures that should aid tourism income in the fourth quarter," Owen noted.
