A hiccup on the road to economic recovery? Business conditions in Egypt’s non-oil private sector deteriorated at a faster pace in March compared to February, according to the Emirates NBD PMI compiled by Markit. The reading fell to 45.9 in March from 46.7 a month earlier, still below 50 and deep in contraction territory. “Sharper falls in output and new orders were recorded, while firms continued to reduce workforce numbers and were reluctant to engage in purchasing activity. On the price front, substantial cost pressures, stemming from the weak exchange rate relative to the [USD], continued to translate into higher selling prices, though rates of inflation softened.”

Tim Fox, head of research and chief economist at Emirates NBD, says “although the economy’s rebalancing process is proceeding as one would expect — evident through a narrowing in the trade deficit and higher FX reserves — it will take some time before this translates into stronger growth momentum. One silver lining from the report is that inflationary pressures are continuing to ease.” The report notes “anecdotal evidence” highlighting “weak underlying demand, and unstable economic conditions amid high inflationary pressures and currency weakness.”

Other signs of daylight: The pace of contraction in buying levels easing to their weakest in eight months despite staying sharp, backlogs of work decreased for the first time in one-and-a-half years, and the rate of job losses easing to its weakest in over a year.

…The PMI reading suggests the “economy hasn’t yet turned the corner despite painful austerity measures and currency reform,” Tarek El Tablawy writes in Bloomberg. He says the news contrasted President Abdel Fattah El Sisi’s “upbeat” visit to the US.