Egypt private sector contraction slows, buoyed by foreign business -PMI

CAIRO (Reuters) - Egyptian non-oil private sector activity contracted for a third month in February, but at a slower rate than in January after foreign business helped buoy demand, a survey showed on Wednesday.

IHS Markit’s Purchasing Managers’ Index (PMI) came in at 49.3, up from 48.7 in January but still below the 50.0 threshold that separates growth from contraction.

“The rate of new foreign business growth was the sharpest in nearly 10 years of survey data collection,” IHS Markit said. “Firms reported an increase in new contracts as well as a slight improvement in tourism activity.

“Nevertheless, overall demand was hampered by weak customer spending as markets remained depressed due to the pandemic,” the survey compiler added.

New export orders registered 56.3 in February, up from 52.4 in January and 49.7 in December.

The non-oil private sector as a whole began contracting in December, ending a three-month expansion, after a resurgence in coronavirus cases dampened demand.

But the shrinkage of output and new orders slowed, with the output sub-index climbing to 48.9 from 48.6 in January and the new orders sub-index to 49.1 from 48.0.

Job numbers continued to fall as some firms did not replace voluntary leavers in an effort to lower staff costs, even as others increased hiring due to rising workloads, IHS Markit said. The employment sub-index came in at 49.3 compared to the 48.7 recorded in January.

“Alongside business sentiment data, this gives promising signs for an expansion in output as the impact of the COVID-19 pandemic subsides,” IHS Markit economist David Owen said.

Reporting by Patrick Werr; Editing by Catherine Evans