Egypt’s non-oil private sector extends contraction in April: HSBC

CAIRO: Egypt’s non-oil private sector post a further deterioration in business conditions for a fourth straight month at April-end,  as input costs and output charges continued to rise, HSBC announced in a survey released Tuesday.

The HSBC Egypt Purchasing Managers Index (PMI) hit 49.8 points in April, fractionally up from 49.8 points in March, and signaling a “further deterioration,” albeit the slowest in the four-month slip.

Readings above 50.0 reflect an improvement in business conditions, while a breach below this level marks a deteriorating business. The sector recorded a 17-month low of 46.8 at February-end.

“A number of survey participants referred to stronger demand conditions as the principal factor behind rises in activity,” according to the survey.

Commenting on the survey, Philip Leake, an economist at Markit said, “Business conditions in Egypt’s non-oil private sector economy worsened for the fourth month running in April, driven by an ongoing decline in employment.”

“However, with output and new orders growing simultaneously again, it may not be long before the PMI breaches 50.0. On another positive note, cost pressures eased sharply during the month, with the depreciating pound having less of an impact on purchase prices in the latest period,” he added.

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