Egypt’s non-oil private sector activity neared growth territory in June as new business expanded for the first time in seven months amid easing COVID-19 measures, a survey showed on Tuesday.
IHS Markit’s Purchasing Managers’ Index (PMI) climbed to 49.9, up from 48.6 in May and just below the 50.0 threshold that separates growth from contraction.
“Firms often noted a rise in tourist numbers as foreign travel opened up, as well as an improvement in export orders,” IHS Markit said, Reuters reported.
Output and new orders increased for the first time since November 2020, with both subindexes registering 50.2, up from 47.9 and 47.7 in May, respectively.
The non-oil private sector as a whole began contracting in December, ending a three-month expansion, as a resurgence in coronavirus cases dampened demand.
Inflation in input costs continued to accelerate in June, with the input prices subindex rising to a nearly two-year high of 55.9, compared to 55.2 in May.
“Commodity prices, particularly metals and plastics, drove a steep increase in purchasing costs,” said IHS Markit economist David Owen.
Firms again chose to absorb increasing cost burdens rather than passing them on to customers, as the increase in output prices slowed to a three-month low of 51.0.
Employment continued to fall, but at the softest rate since March, up to 48.7 from 48.3 in May. Many firms chose not to replace voluntary leavers, though this was partly offset by an uptick in hires due to rising demand.
“It was the Employment Index that held back the headline figure as job numbers continued to fall overall,” Owen said.
Expectations for future output remained strong, easing to 74.1 after soaring to 79.1 in May.
