The downturn in Egypt’s non-oil private sector continued in June, as business conditions worsened for the ninth straight month.
The seasonally adjusted Emirates NBD UAE Purchasing Managers’ Index, which covers manufacturing and services, was at 47.5, little changed from May’s 47.6. A figure above 50 means business is expanding; below 50 signals contraction.
The second quarter average of 47.3 was marginally higher than those seen in the first quarter (46.9), and last quarter of 2015 (46.8).
Emirates NBD said in its report that private sector employment continued to fall, marking a 13-month period of staff cuts. The rate of job shedding was robust overall, albeit the weakest since February.
It also said that the recent EgyptAir incident, in which a plane crashed into the Mediterranean in May killing all 66 people on board, was reported to have depressed tourism, contributing to another marked reduction in new business from abroad.
“June’s survey suggests the Egyptian economy continued to slow at the end of FY2015/16, with the tourism sector appearing particularly weak,” said Jean-Paul Pigat, senior economist at Emirates NBD.
“As we start the new fiscal year in July, hopes for a stronger recovery will depend in large part on whether a solution to the ongoing FXliquidity crunch can be found in the near term.”