CAIRO, May 5 (Reuters) – Business activity in Egypt’s private sector, excluding oil, came close to stabilising in April after a three-month contraction, as new orders rose, a survey showed on Tuesday.
The HSBC Egypt Purchasing Managers Index edged up to 49.8 in April, almost touching the 50 mark, above which signals growth in activity. The index rose from 49.6 in March.
“Business conditions in Egypt’s non-oil private sector economy worsened for the fourth month running in April, driven by an ongoing decline in employment,” Markit economist Philip Leake said. “However, with output and new orders growing simultaneously again, it may not be long before the PMI breaches 50.0.”
Employment fell for the fifth straight month, with some companies saying staff had left to seek better opportunities or to take up their pensions.
New orders, however, increased for the second consecutive month and survey respondents said that reflected a more stable environment.
Egypt held an investment conference in March when tens of billions of dollars of new foreign investment were announced, as the government tries to turn around an economy battered by four years of economic and political turmoil.
The survey showed rising inflation continued to weigh on the economy in April, though to a lesser degree than in previous months.
“On another positive note, cost pressures eased sharply during the month, with the depreciating pound having less of an impact on purchase prices in the latest period,” said Leake.
Through administrative measures, Egyptian authorities appear to have largely stamped out the currency black market, but this has made it more difficult for some firms to obtain hard currency.