Egypt's non-oil private sector contracted, in output, new orders in October and employment dropped to its lowest level in eight months, survey figures from Emirates NBD and Markit Economics showed Tuesday.
The Egypt Purchasing Managers' Index, or PMI, fell to 47.2 in July from 50.2 in the previous month. Any reading below 50 indicates contraction, while a score above 50 suggests expansion in the sector.
Solid reductions in output and new business were the main drivers in the overall decline, while further job losses also contributed, the Markit said.
Moreover, the bleak picture of the sector as a whole wasn’t helped by reports of another depreciation of the Egyptian pound against the US dollar. This was reflected in a sharper rise in purchasing costs. In contrast, output charges fell slightly as companies attempted to secure new clients, Markit added.
“Some of the issues that appear to be undermining output in the private sector – including problems with power supplies and the availability of FX – highlight the need to implement a more concerted program of structural reforms to boost the economy’s short and long-term outlook,” said Jean-Paul Pigat, Senior Economist at Emirates NBD.