Business conditions deteriorate for 5th month in a row

Operating conditions for Egypt’s non-oil private sector deteriorated in February for the fifth month in a row, according to a survey of local businesses.

Among the reasons cited for the downturn are a subdued customer demand due to “fragile economic conditions,” and high input costs due to the weakness of the Egyptian pound against the dollar.

The Purchasing Manager’s Index (PMI) inched up to 48.1 in February compared to 48.0 in January. However, any figure below 50 indicates that businesses report that conditions have gotten worse during the month. Egypt’s PMI score has been below 50 since October 2015, with November’s score of 45 representing a 26-month low.

“The PMI continues to reflect relatively subdued domestic demand conditions at the start of 2016, and is consistent with other official data we have on the real economy,” Jean-Paul Pigat, senior economist at survey-sponsor Emirates NBD, said in a statement.

Employment dropped for the ninth month in a row, with surveyed businesses indicating that workers had left their jobs to search for better work opportunities. For the first time in six months, businesses reported increasing their tariffs, citing a rise in the price of inputs due to the weak Egyptian pound.

According to businesses surveyed, output, new orders and purchasing activity all fell in February, though at a slightly slower rate than in January. According to Pigat, “some encouragement” can be taken in the relatively slow pace of the decline.