Cairo – Mubasher: The Egyptian non-oil private sector activity shrank in December, with output and new orders sliding after a rise in coronavirus cases dampened demand, according to a survey released on Tuesday.
The seasonally adjusted IHS Markit Egypt Purchasing Managers’ Index (PMI) declined to 48.2 in December from 50.9 in November. A reading above 50 indicates expansion, while a reading below that signals contraction.
“Fears of a 'second wave' of the pandemic and renewed lockdown measures meant some businesses held off from completing new orders in December, despite increased optimism for the future as COVID-19 vaccines begin to be distributed around the world,” IHS Markit economist David Owen said.
The reduction in demand led to an excess of input stocks in December, as the volume of inventories increased at the strongest rate since June 2012.
Consequently, purchasing activity dropped, and job cuts grew at the fastest pace in four months.
“The outlook for the next 12 months of activity improved strongly in December, as Egyptian companies placed increased hopes of a recovery in 2021. Optimism around effective COVID-19 vaccines led the improvement, while there were also expectations of new contracts and business expansion.”
