Signs of Stabilization Emerge in Egypt's Non-Oil Private Sector
Egypt's non-oil private sector edged closer to stability in May, as the pace of contraction in business activity and new orders eased, according to the latest S&P Global Purchasing Managers' Index (PMI) report released on Tuesday.
The seasonally adjusted PMI rose to 49.5 in May, up from 48.5 in April, signaling a softer economic downturn. Although the index remains just below the critical 50-point threshold that separates expansion from contraction, the upward movement indicates a deceleration in the sector's decline.
Both output and new business remained in contraction, but the drops were less severe than in the previous month. A smaller number of companies reported weakened customer demand, hinting at a potential turning point in consumer sentiment.
Despite these improvements, firms cut back on purchasing activity at the fastest rate in seven months and continued to reduce staffing levels for the fourth month in a row, highlighting lingering caution in operations and hiring.
The output index climbed to 49.5 from 47.4 in April, while the new orders index rose to 49.1, also up from 47.4. These gains suggest a gradually improving business environment, even if growth has yet to fully materialize.
Cost pressures, however, remained a challenge. Input prices continued to climb, driven largely by rising supplier costs and ongoing currency fluctuations. In turn, many businesses raised their selling prices to protect profit margins.
David Owen, economist at S&P Global Market Intelligence, commented that although May's data still points to contraction, the slowdown in the rate of decline is encouraging, with the figures presenting a gentler drop than both April's results and the long-term average.
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Signs of Stabilization Emerge in Egypt's Non-Oil Private Sector
Egypt's non-oil private sector edged closer to stability in May, as the pace of contraction in business activity and new orders eased, according to the latest S&P Global Purchasing Managers' Index (PMI) report released on Tuesday. The seasonally adjusted PMI rose to 49.5 in May, up from 48.5 in April, signaling a softer economic downturn. Although the index remains just below the critical 50-point threshold that separates expansion from contraction, the upward movement indicates a deceleration in the sector's decline. Both output and new business remained in contraction, but the drops were less severe than in the previous month. A smaller number of companies reported weakened customer demand, hinting at a potential turning point in consumer sentiment. Despite these improvements, firms cut back on purchasing activity at the fastest rate in seven months and continued to reduce staffing levels for the fourth month in a row, highlighting lingering caution in operations and hiring. The output index climbed to 49.5 from 47.4 in April, while the new orders index rose to 49.1, also up from 47.4. These gains suggest a gradually improving business environment, even if growth has yet to fully materialize. Cost pressures, however, remained a challenge. Input prices continued to climb, driven largely by rising supplier costs and ongoing currency fluctuations. In turn, many businesses raised their selling prices to protect profit margins. David Owen, economist at S&P Global Market Intelligence, commented that although May's data still points to contraction, the slowdown in the rate of decline is encouraging, with the figures presenting a gentler drop than both April's results and the long-term average.
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