Egypt Records Highest Increase in Purchasing Managers' Index

The Minister of Planning and Economic Development Hala El-Said said that Egypt records the highest increase in the latest data of Purchasing Managers’ Index (PMI) issued for May 2020, reflecting the start of the relative recovery of production activity compared a year earlier.

Egypt recorded the highest rate of increase in the PMI reading for May at 37% compared to the previous estimates, followed by Vietnam with an increase rate of 30.6% and the United Kingdom by 24.8%, however, South Africa recorded a decline of 7.4% in May.

The PMI is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index that summarizes whether market conditions, as viewed by purchasing

The importance of this indicator is that companies, investors and financial institutions depend on it to know the degree of economic activity in general, and non-oil private sectors in particular.

El-Said pointed to the challenges referred to by the index in light of the global and local economic repercussions of the outbreak of the novel coronavirus, as signs of a relative recovery of non-oil private sector activity and decline in rates of deterioration.

The PMI rose in May by 11 points from 29.7 points to 40.7 points, registering an increase rate of 37% compared to last April.

Egypt's Supply Chains encountered difficulties adapting to epidemic

Al-Said said that the burdens of the total cost of Egyptian non-oil sector companies have declined for the first time in the history of the supply chains, as reduced wages were associated with a marginal increase in purchasing prices in May, pointing out that supply to Egyptian companies were also slightly slower, after the most severe deterioration in performance during March and April as supply chains encountered difficulties adapting to the epidemic.

She noted that, in terms of the economic situation, the PMI data reflects the relative improvement in the commercial activity of non-oil private sector companies in Egypt compared to the previous month, yet, there is still a stagnation in domestic demand, which was reflected in weak sales and the decline in new orders.

Meantime, the rate of private consumption increased By 1.8% during the first half of the fiscal year 19/2020, which is a small growth rate compared to historical private consumption rates in Egypt.