Survey: Private sector conditions at 17-month low

Operating conditions for Egypt’s private sector hit a 17-month low in February, according to HSBC’s Purchasing Manager’s Index. 

The Index fell to 46.8 in February, down from 49.3 in January and 51.4 in December. Readings below 50 indicate that conditions are worse than they were the previous month.

According to executives surveyed for the Index, producers in Egypt’s non-oil private sector are facing sharp declines in both orders and outputs and rising costs due to the devaluation of the Egyptian pound. As a result, companies reported employing fewer workers.

“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,” said a press statement from Philip Leake, economist at Markit Economics, which carried out the survey.

Egypt’s government is keen to present an image of a recovering economy as it prepares for a economic conference aimed at courting foreign investment, scheduled to being March 13 in Sharm el-Sheikh.

The government reported 6.8 percent year-on-year GDP growth in the first quarter of the 2014/15 fiscal year, which spanned July to September 2014. It has not yet released growth figures for the quarter that ended in December 2014.