Egypt Business Activity Worsens in Reversal of 3 Months of Gains
(Bloomberg) -- Business conditions for Egypt’s non-oil private sector worsened toward the end of 2020 as the pandemic hit demand and triggered an acceleration in job cuts.
The IHS Markit Purchasing Managers’ Index dropped to 48.2 in December, reversing three months of expansion for the Arab world’s most populous nation. A reading of 50 or more indicates growth; Egypt’s PMI was 50.9 in November.
“The decline in sales was a surprise to those firms that made additional purchases earlier in the fourth quarter, as stocks of unused inputs built up at the quickest rate since mid-2012,” David Owen an economist at IHS Markit, said in the report released Tuesday.
“Purchasing activity was subsequently reduced sharply, while job numbers fell at the strongest rate since August,” Owen said.
Companies also saw rising input stocks in December, which drove up inventories at the fastest rate in 8.5 years.
The report also showed:
- Employment cuts accelerated to the fastest in four months
- December’s PMI was the lowest reading since June 2020, according to data compiled by Bloomberg
- Companies said the possibility of the government tightening measures to combat the virus had clients holding off from completing new orders
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