ADVERTISEMENT

Non-oil business activity slows for fourth straight month in Jan

The Emirates NBD Egypt Purchasing Managers Index (PMI) for the non-oil private sector slipped to 48.0 points in January from 48.2 points in December, remaining below the 50-point mark that separates growth from contraction.

An engineer covers his face as workers pour molten iron into a container at a factory belonging to Ezz Steel, Egypt's largest steel producer, at an industrial complex in Sadat City, 94 km (58 miles) north of Cairo, April 17, 2013. REUTERS/Amr Abdallah Dalsh

Business activity in Egypt shrank for the fourth straight month in January, a survey showed on Wednesday, as new export orders tumbled and output declined for the fourth time in as many months.

Egypt has been struggling to revive its economy since a popular uprising in 2011 and subsequent political upheaval that has driven both investors and tourists away, depriving it of the foreign currency it needs to import raw materials.

"January’s survey represents a marginal slowdown from December, with the export sector appearing to be the main source of weakness," said Jean-Paul Pigat, Senior Economist at Emirates NBD.

The new export order subindex fell to 40.2 points in January from 43.5 points in December, and new orders declined to 47.7 points in January from 48.8 points the previous month.

ADVERTISEMENT

"A fragile economic climate was cited as one of the drivers of the drop in new business, and this led panelists in turn to reduce their output," Markit, which compiled the data, said in a report.

The output subindex fell to 46.1 points in January from 48.2 points in December, with around 30 percent of the panel noting a fall, the survey said. Lower output was linked to weaker client demand as well as raw material shortages.

"Mirroring the accelerated reduction in output, new business fell more quickly in January. With more than one-in-four respondents noting a drop in new work," Markit said.

Egypt has been wrestling with a currency crisis that economists blame on an over-valued pound. The central bank had been gradually weakening the pound but then surprised markets by strengthening it by 20 piasters against the dollar to 7.7301 pounds, still far from the black market rate of 8.7 pounds.

The survey showed declines in employment for the eighth consecutive month although the pace of layoffs slowed, with the related subindex rising to 48.2 points in January from 46.5 the month before.

ADVERTISEMENT

President Abdel Fattah al-Sisi has pledged to reduce the jobless rate to 10 percent over the next five years. Unemployment stood at 12.8 percent in December, according to the government. Analysts believe it may be much higher.

The economy grew around 4.2 percent in 2014/15 and is expected to grow around 5 percent in 2015/16.

"We expect economic activity to accelerate in the coming months, with our forecast for real GDP growth in FY2015/16 sitting at 3.9 percent," Emirates NBD's Pigat said.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

I stand with you - Buhari assures Tinubu during birthday phone call

I stand with you - Buhari assures Tinubu during birthday phone call

Sanwo-Olu urges Lagosians to let naira gains reflect on cost of commodities

Sanwo-Olu urges Lagosians to let naira gains reflect on cost of commodities

Gov Mohammed to pay ₦2.1bn as Hajj subsidy for Bauchi's intending pilgrims

Gov Mohammed to pay ₦2.1bn as Hajj subsidy for Bauchi's intending pilgrims

Tinubu is 72 — who are Nigeria's other oldest presidents in office?

Tinubu is 72 — who are Nigeria's other oldest presidents in office?

You're an exceptional leader - Gov Adeleke celebrates Tinubu at 72

You're an exceptional leader - Gov Adeleke celebrates Tinubu at 72

Okuama Killings: Police hand over wanted Delta monarch to military

Okuama Killings: Police hand over wanted Delta monarch to military

FG postpones start of Port Harcourt-Aba train service to April – Minister

FG postpones start of Port Harcourt-Aba train service to April – Minister

Minister wants NASS to declare State of Emergency on 3rd Mainland, Carter bridges

Minister wants NASS to declare State of Emergency on 3rd Mainland, Carter bridges

Katsina Gov believes Tinubu has set Nigeria on path of economic greatness

Katsina Gov believes Tinubu has set Nigeria on path of economic greatness

Pulse Sports

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

Michelle Alozie: I had to do it because of African referees

Michelle Alozie: I had to do it because of African referees

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

ADVERTISEMENT
ADVERTISEMENT