CAIRO: Egypt’s non-oil private sector slipped to the worst level since September, 2013, due to “robust contractions” in output and new orders, according to an HSBC survey released Tuesday.
The HSBC Egypt Purchasing Managers Index (PMI) plunged to a 17-month low of 46.8 points in February, compared to 49.3 in the previous month. Readings above 50.0 reflect an improvement in business conditions, while a breach below this level marks deteriorating business.
Surveyed companies cited “weaker order books to a depreciation of the Egyptian pound against the U.S. dollar.”
Philip Leake, an economist at Markit said: “Latest PMI figures showed Egypt’s non-oil private economy continuing to falter at the start of 2015. Output, new orders and employment all fell solidly – leading to the sharpest deterioration in overall business conditions in almost a year-and-a-half.”
Egypt’s pound held steady at 7.53 per U.S. dollar over the past three weeks, after the Central Bank of Egypt (CBE) weakened the currency against the dollar through 10 consecutive depreciations in a fight against the black market since Jan. 18.
For Leake, the decision to allow the Egyptian pound to depreciate against the dollar had an “inflationary impact” in February as overall input prices surged at the quickest rate in seven months.