Egypt's non-oil private sector expanded for the second straight month in December, albeit at a slower pace, with firms benefiting from increased new orders and a slight expansion in output, a business survey showed on Tuesday.
The S&P Global Egypt Purchasing Managers' Index (PMI) retreated to 50.2 in December from a 61-month high of 51.1 in November, topping the 50.0 threshold that separates growth from contraction for a second month after holding below that line since last March.
A PMI reading of 50.2 historically correlates with annual gross domestic product growth of approximately 5%, S&P Global said.
"Improvements in order books have been a clear factor behind strong business performances over the past few months," S&P Global economist David Owen said.
Purchasing activity rose for the first time in 10 months, while employment fell. Cost inflation picked up slightly from its recent low in November, resulting in only a marginal increase in average selling prices.
Driving the improvement in business conditions were additional expansions in activity and new orders, reflecting reports from survey panelists of stronger demand conditions and increased client spending.
Employment declined, with many firms citing challenges in replacing staff who had left.
The firms surveyed viewed the next 12 months as neutral, with the future output index at 50.
