Egypt PMI retreats as output, sales contract

Shoppers wearing protective face masks walk near a sale sign in a shop window inside a Carrefour hypermarket, amid the coronavirus disease (COVID-19) pandemic, in the Cairo suburb of Maadi, Egypt September 25, 2020. REUTERS/Amr Abdallah Dalsh/File Photo

CAIRO, Oct 5 (Reuters) - Egypt's non-petroleum private sector activity contracted for a 10th straight month in September, although optimism that the economy would recover over the next year reached an all-time high, a survey showed on Tuesday.

IHS Markit's Purchasing Managers' Index (PMI) slid to 48.9 - below the 50.0 threshold that separates growth from contraction - from 49.8 in August as weaker customer demand caused new orders and output to slide.

"Local and global developments related to the pandemic meant that firms grew increasingly confident that activity will improve over the next year," IHS Markit said.

"In fact, the overall level of optimism climbed to the highest recorded since this particular series began in April 2012, with around 71% of panellists giving a positive forecast."

The new orders sub-index slipped to 49.1, partly due to a drop in export sales, from 50.4 in August, which was the fastest pace in nine months. The output sub-index declined to 48.9 from 50.1.

The increased business optimism helped boost employment numbers for a third consecutive month in September, with the sub-index inching up to 50.3 from 50.2 in August.

The future output expectations sub-index jumped to 85.7 in September from 75.3 in August.

"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," IHS Markit economist David Owen said.

(Corrects comparison month to August (not July) in paragraph 2)

Reporting by Patrick Werr; Editing by Catherine Evans

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