Egypt’s non-oil private sector sees slight relief in June

What is going on here?

Egypt’s non-oil private sector saw some minor relief in June as easing price pressures and an inflow of foreign cash lifted its PMI to 49.9.

What does it mean?

Egypt’s non-oil sector is on the brink of growth, rising to a PMI of 49.9 in June from 49.6 in May, just below the 50.0 growth threshold. The improvement, based on data from the S&P Global Purchasing Managers’ Index, is attributed to a better demand outlook and easing price pressures, helped by foreign investment from the UAE and a stronger agreement with the IMF. Importantly, turnover Volumes rose for the first time since August 2021, and new orders reached a nearly three-year high of 50.2. While manufacturing and services sectors showed promising results, construction activity continued to contract. Employment remained stable, reflecting companies’ varied strategies to manage rising demand and changes in the workforce.

Why should I care?

For markets: Mixed but promising prospects.

Egypt’s non-oil sales and new orders are rebounding, signaling a potential market recovery. While the PMI has not broken through the growth line, rising numbers suggest that if this tendency continues, we could see stronger results in the coming months. Investors could keep an eye on the manufacturing and services sectors, which are showing signs of stability, in contrast to the struggling construction sector.

Bigger picture: Inflation increasing control and investment.

Egypt’s government has reshuffled its cabinet to better manage inflation and attract investment. The move, combined with an easing of price pressures, reflects a strategic effort to stabilize the economy in the face of recent volatility. However, the bottoming out of the forward manufacturing subindex underscores the ongoing uncertainty. Positive expectations across most sectors remain a bright spot, with hopes for steady foreign cash flows and improved demand.