Daniel Richards, MENA economist at Emirates NBD, said that Egypt's Purchasing Manager's Index (PMI) survey readings turned positive in November, signalling an expansion in the non-oil sector for the first time in over two years. He added that this suggests that the wide-ranging economic reforms embarked upon in November 2016 as part of an IMF-sponsored programme are beginning to bear fruit. Moreover, Richards said that strong sentiment towards future prospects chime with the view that the Egyptian economy will continue to strengthen over the coming quarters. The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the Egyptian private sector. In this context, the survey results stated that the headline PMI rises to 50.7 from 48.4, noting that this improvement was the strongest recorded since August 2015, albeit only slight overall. Moreover, the survey results also found an increase in output and new orders and also noted that there is growth in the new export orders, making it reach high records. Output in the Egyptian non-oil private sector grew in November, ending a 25 months of deterioration. Not surprisingly, the demand for Egyptian-produced goods and services increased during November. Inflows of new work returned to growth, recording the fastest expansion in 27 months. Furthermore, demand from foreign sources rose at the fastest pace since the survey began, the Emirates NBD Egypt PMI press release declared. In response to higher output requirements and in anticipation of further growth, non-oil private sector companies increased their buying activity. Quantities of purchases rose at a solid rate overall, whilst preproduction inventories accumulated at the fastest rate since November 2014, according to the PMI. In terms of inflation, average cost burdens rose at a sharp rate in November. Meanwhile, the rate of input price inflation eased and registered below the historical series average. Furthermore, selling prices continued to increase, but at the slowest rate since February 2016. Finally, the result stressed that the sentiment towards future growth prospects remained strongly positive in the latest survey, with the respective index reaching a 27-month high in November, partly reflecting optimism towards an expected economic upturn. It should be mentioned that the Emirates NBD Egypt Purchasing Managers' Index is based on data compiled from monthly replies to questionnaires sent to purchasing executives in approximately 450 private sector companies, which have been carefully selected to accurately represent the true structure of the Egyptian non-oil economy, including manufacturing, services, construction, and retail.
