Egypt’s non-oil private sector returns to growth in September: PMI

Egypt’s non-oil private sector grew in September, its first expansion in 14 months, and a sign Egypt may be over the worst of a months-long coronavirus slowdown, a survey showed on Monday.

IHS Markit’s Purchasing Managers’ Index (PMI) came in at 50.4, up from 49.4 in August and marginally above the 50.0 threshold that separates growth from contraction. It was the first time activity in the private non-oil economy expanded since July 2019, when the index was at 50.3.

“This suggests the non-oil economy is seeing a modest turnaround after the devastating impact of the COVID-19 pandemic,” IHS Markit economist David Owen said.

“Both the Output and New Orders series has been in expansion territory for three months, pointing to a more upbeat picture for the third quarter of 2020.”

It was only the seventh month in the last five years in which activity expanded, according to the PMI.

New export orders rose to 55.3 from 53.0 in August, its second-highest reading since the index began nearly a decade ago.

Consumer demand grew by its fastest in more than five years, with new orders registering 51.9, up from 51.2 in August. Employment continued to shrink, but at 48.8 the contraction was far slower than the August figure of 45.9.

“Some firms notably increased hiring due to a rise in new work, which in part offset workforce reductions at other companies,” IHS Markit said in a statement accompanying the figures.

The economy has been ravaged since mid-March by a near halt in tourism, which contributes up to 15 percent of the gross domestic product if supporting industry and investment are included.

Private non-oil activity registered its worst showing ever in April, at 29.7, after the pandemic hit in full force in mid-March.

FILE PHOTO: A man works at a glass factory, at Al Qalyubia Governorate, north of Cairo, Egypt, Egypt September 26, 2020. Picture taken September 26, 2020. REUTERS/Mohamed Abd El Ghany

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