Egypt’s private sector economic activities contracted in August. According to a survey of HIS Markit’s Purchasing Managers’ Index (PMI) for August, it was 49.4 from 49.6 in July. The data is the first as the world reopens from the lockdown.
The July reading is the best recording in Egypt in 50 years. HIS Markit adds that output and new orders increased in August, building on a recovery in July. This means business will pick up gradually despite the lag recorded for August.
Output increased for the second month in August but weakened to 50.5 from July’s 50.9. Before, the output had been contracting for an entire year. Meanwhile, new orders registered 51.2, down from July’s 51.4, its highest reading since November 2017.
Egypt’s major revenue earner, the tourism industry, accounts for about 5% of the economy, has remained weak, even after the government reopened Egypt to international flights at the end of June following a three-month closure because of the coronavirus.
Egypt has allowed cafes, restaurants and many tourist sites to resume operations. The private sector non-oil activity, which has weakened every month since July 2019, registered its worst showing ever in April, at 29.7, after the pandemic hit in full force in mid-March.
Employment in Egypt reduced in August, dragging the headline PMI index down. The employment index slid to 45.9 From 46.1 In July, marking its tenth monthly consistent contraction.