The contraction of the non-oil private sector in Egypt slowed in July

2023-08-03 05:59:00

Record slowest contraction in 32 months

Dubai – Al Arabiya.net

Posted on: August 03, 2023: 09:59 AM GST Last updated: August 03, 2023: 10:08 AM GST

The “Standard & Poor’s Global” index of purchasing managers in Egypt showed today, Thursday, that the contraction of the non-oil private sector in the country recorded in July its slowest pace in about two years, even at a time when expectations remain weak for an improvement soon.

The index rose to 49.2 points in July from 49.1 in June, but it is still below the 50-point level that separates growth from contraction.

Activity has contracted for 32 consecutive months, but July’s contraction was the slowest since August 2021.

“Following the June results, Egyptian non-oil companies recorded another month of relatively modest contraction in both production and new orders compared to their levels recorded at the beginning of the year,” S&P Global said.

“However, the decline is still widespread, with declines recorded in all four sectors covered by the survey,” she added.

The sub-index for new orders rose to 48.5 points from 48.4 points in June, while the sub-index for production rose to 48.9 points from 48.8 points.

The sub-index for future production expectations increased to 52.9 from 51.6 in June, still near an all-time low.

“Companies’ outlook for the future remains largely weak, with only 6% of survey respondents expecting output growth over the next 12 months,” said David Owen, an economist at Standard & Poor’s Global.

“There were also positive signs of inflationary pressures, which will be welcomed by both companies and customers,” he added.

According to the Central Agency for Public Mobilization and Statistics in Egypt, annual inflation in Egyptian cities accelerated to a record rate of 35.7% in June from 32.7% in May, while core inflation hit a record high of 41%.

S&P Global said employment fell for the eighth month in July.