Egypt: PMI regains lost ground in December

The Emirates NDB Egypt Purchasing Managers’ Index (PMI) rose from 45.0 in November to 48.2 in December, regaining some of the ground lost in recent months. However, the result still lies below the 50-threshold that separates contraction from expansion in the non-oil producing private sector. December’s result was the strongest in three months.

The pace of contraction in output, new orders and employment all eased compared to the previous month. However, exports still tallied a profound contraction as security concerns weighed on demand. In addition, ongoing weakness of the Egyptian pound led to a sharp increase in input costs.

Emirates NBD analysts noted that, “the recovery in the December PMI data is encouraging, and suggests that the weak November survey was at least partly due to temporary factors, impacting tourism and external demand. As such it does not alter our view that the Egyptian economy will expand 4.2% y/y in FY2015/16.”

Met the why particular Consensus Forecast panelists expect total investment to rise 6.3% in fiscal year 2016. The panel expects total investment to increase 6.6% in fiscal year 2017.