(Bloomberg) --
Egypt's non-oil private sector approached a growth tipping point, with increased purchasing, output and employment signaling that the Arab world's most populous nation is on track to economic recovery, according to a report released Sunday.
The IHS Markit Purchasing Managers' Index edged up to 49.8 in August, its highest level since June and just shy of the 50 mark that separates growth from contraction. While the headline figure remained in contraction territory, signs of a pickup in demand led to record expansion in purchasing activity, the survey said. New orders grew for the second time in three months, rising to 50.4 from 48.7 the previous month.
Though “still in contraction territory, the PMI masked renewed upticks in output and new orders in August to suggest that businesses had taken further steps to recover from the COVID-19 pandemic,” IHS Markit said. Companies “widely pointed to a rebound in market activity and an increase in tourism numbers as travel reopened,” helping employment levels rise for a second month, it added.
“That said, all three indices remained close to the 50.0 neutral threshold in August, suggesting that growth rates were only marginal,” the report said.
Companies, concerned that supply-side pressures would lead to further price hikes, looked to build up their input stocks. That helped purchasing activity expand for the first time in nine months and at the quickest pace since April 2011, the report said.
The report also said:
- Input price inflation picked up to its highest level in two years,, with companies linking that to rising commodity prices
- Rise in input prices was passed on to consumers “to a much greater extent than in July,” as companies looked to boost profit margins
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