{"id":559805,"date":"2021-02-04T03:56:40","date_gmt":"2021-02-04T03:56:40","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/04\/private-sector-sentiment-still-in-contraction-territory\/"},"modified":"2021-02-04T03:56:40","modified_gmt":"2021-02-04T03:56:40","slug":"private-sector-sentiment-still-in-contraction-territory","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/04\/private-sector-sentiment-still-in-contraction-territory\/","title":{"rendered":"Private sector sentiment still in \u201ccontraction\u201d territory"},"content":{"rendered":"

<\/a> Non-oil private sector activity in Egypt continued to contract in January<\/strong>, albeit at a slower pace as falls in output and orders tempered, according to IHS Markit purchasing managers\u2019 index (PMI) figures (pdf)<\/a>. The PMI gauge edged up a little from 48.2 in December<\/a> to 48.7 in January, below the 50.0 mark \u2014 which separates expansion from contraction \u2014 for the second consecutive month. This reflects a \u201cmoderate deterioration\u201d in business conditions as output, new orders and employment indices climbed from December.<\/p>\n

But respondents are optimistic about 2021:<\/strong> In a reversal of the gloomy sentiment seen during the final months of 2020, almost 40% of respondents now expect growth and output expansion throughout 2021 as covid-19 vaccines are rolled out. Just 1% now expect the situation to worsen.<\/p>\n

Business activity had fallen back into contraction territory in December<\/strong> following three months of growth as the resurgence in coronavirus cases depressed demand and hit sentiment.<\/p>\n

A pick-up in exports helped to support output in January<\/strong>, which continued to fall during the month due to falling new orders, reduced client spending and covid-related disruption.<\/p>\n

Input purchases fell at their sharpest pace in four years<\/strong>, which translated into \u201ca renewed drop in stock levels.\u201d Disruptions caused by the pandemic caused deliveries to be longer than usual, and some suppliers struggled to meet demand for materials that were in short supply. This produced a ripple effect on purchasing costs, which jumped at the fastest rate for three months.<\/p>\n

This didn\u2019t translate into higher selling prices:<\/strong> \u201cEfforts to keep market prices low meant average selling prices rose only marginally,\u201d said IHS Markit economist David Owen. The reading indicates that the rise in average selling prices was the slowest since August 2020.<\/p>\n

The employment gauge fell at its <\/strong>slowest <\/strong>rate in 15 months<\/strong> as some firms stepped up recruitment.<\/p>\n

Meanwhile, in the GCC:<\/strong><\/p>\n