Egypt Non-Oil Private Sector Contracts In July

(RTTNews) - Non-oil private sector activity in Egypt contracted in July, results of a survey by Markit Economics showed Tuesday.

The HSBC non-oil private sector purchasing managers' index, or PMI, fell to 49 in July from a six-month high of 51.5 in June. A reading below 50 signals contraction in activity.

Non-oil private sector output declined on a renewed decline in demand in July. New orders contracted, though moderately, in July. This was attributed to the high price of certain raw materials and the ongoing political instability in the country.

Employment levels remained unchanged, after a 26-months sequence of job shedding. Meanwhile, wage inflation slowed in July.

Input costs increased at the fastest rate since April 2013. Subsequently, output prices increased in July.

Simon Williams, chief economist for the Middle East at HSBC, said, "It's a disappointing reading, underscoring the scale of the challenge policy makers face as they try to bring the Egyptian economy back to life."

"The July numbers may also capture the first effects of last month's subsidy cuts which seem to have not just lifted prices but hit demand, too," Williams said.