Back to the complete issue
Monday, 6 May 2019

Egypt’s non-oil business activity expands for the first time in eight months

Non-oil business activity expanded for the first time in eight months in April, driven by a rise in domestic orders, according to the Markit / Emirates NBD PMI gauge (pdf). The latest purchasing managers’ index hit 50.8 in April up from 49.9 in March — the largest monthly increase since August 2015.

Making sense of the index: A reading above 50.0 shows that business activity is expanding, while a figure below this indicates contraction.

Output entered positive territory for the first time in 18 months, but remains largely driven by domestic orders. Export orders continued to contract but staged a slight recovery from March. “Firms appear to be shoring up domestic demand by price discounting — output prices dipped back below 50, the third time this year they have declined.”

Rising demand was spurred by price discounting, leading output prices to contract for the third time this year. This, combined with rising input prices, is likely to put pressure on margins over the coming months.

Survey respondents “appear to be more confident with regards [to] future conditions,” Emirates NBD writes, noting that the number of firms expecting output to be greater over the rest of the year is greater than those with a positive outlook during the previous month. “This greater optimism is reflected in their hiring, as employment returned a reading above 50.0 — albeit marginally — for the first time since 2015.”

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.