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Egypt Non-oil Private Sector Contracts In January

Egypt's non-oil private sector contracted at a faster rate in January, data from the IHS Markit revealed on Tuesday.

The Purchasing Managers' Index, or PMI, decreased to 46.0 in January from 48.2 in December. Any reading below 50 indicates contraction in the sector.

Output declined at the fastest rate since January 2017, and new orders fell at the quickest pace in nearly three years. Export demand softened for the fourth month in a row.

Purchasing activity declined at the sharpest pace in twenty-eight months in January and sales declined, which led to lower input requirements.

On the price front, weaker demand for inputs restricted cost inflation in January as suppliers kept purchase prices unchanged for the first time in the survey history. Selling charges were lowered as cost pressures remained subdued.

Employment in the non-oil businesses decreased for the third month in a row and weaker sales reduced labor requirements.

"On the positive side, this kept input costs subdued, allowing firms to continue their discounting strategies to try and rejuvenate the market," David Owen, an economist at IHS Markit, said.

"As such, business expectations remained positive, despite dropping to a four-month low, as respondents hoped that lower prices would drive sales and activity higher in the coming months."

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