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Non-oil sector sees bigger recovery in July

Sunday 12 August 2018 10:22 AM

Egypt's non-oil exports
Egypt's non-oil exports

Egypt’s non-oil private sector recorded a greater recovery during July, supported by gradual monetary policy normalisation, improved political stability and a rebound in the tourism sector, said Emirates NBD in its latest Egypt PMI survey.

The Emirates NBD Purchasing Managers’ Index (PMI), sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the Egyptian private sector.

Commenting on the Egypt PMI survey, Daniel Richards, Mena economist at Emirates NBD, said: “The positive PMI reading for the first month of the new fiscal year supports our view that real GDP growth will strengthen in 2018/19.”

The main findings of the July survey were as follows:

•    Headline PMI posts 50.3, indicating improving business conditions in the sector
•    New orders and exports rise
•    Future expectations remain positive

The seasonally adjusted Emirates NBD Egypt Purchasing Managers’ Index (PMI) – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – increased from 49.4 in June to 50.3 during July, signalling an improvement in the overall health of the non-oil private sector. Though indicating only a marginal strengthening in business conditions, the headline figure hit an eight-month high as new orders entered expansion territory.  

For the first time in three months, firms operating in the non-oil private sector reported greater volumes of new business amid stronger demand from both domestic and foreign sources. According to panel members, improvements in inbound tourism supported the upturn in domestic new orders, while a strong global economic environment underpinned the expansion in new exports.