Egypt’s non-oil private sector continued to deteriorate in June, but at a significantly lower rate than in May, according to IHS Markit’s latest Egypt Purchasing Managers’ Index (PMI).
The country’s PMI rose to 44.6 in June, compared to 40.7 in May and 29.7 in April. The PMI measurement gives a snapshot of whether a country’s business conditions, with a figure above 50 representing an expansion, and a figure below 50 showing a contraction.
“June's PMI data gave some promising signs that the Egyptian economy is beginning to stabilize. The headline PMI was up to 44.6, from 40.7 in May, signaling a further slowing in the downturn caused by the COVID-19 crisis that reached its worst level in April. Activity fell at the weakest pace in four months, supported by a similar easing to the decline in new business,” David Owen, an economist at IHS Markit, said in a statement.
A lifting of coronavirus lockdown measures helped firms recover, IHS Markit said, but activity still remained weak as some restrictions on travel and tourism are still in place.
Companies also continued to actively cut jobs in June, with the speed of cuts reaching a near four-year high. Salaries have also fallen, and some businesses have elected to not hire new workers. This dynamic has resulted in staffing costs falling for the third month in a row, IHS Markit said, but this could change soon.
“Higher demand at some companies, increased backlogs and sentiment rising to a six-month high all point to firms hopefully restarting hiring in the near future,” Owen added.