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CAIRO, May 5 (Reuters) – Non-oil private sector activity in Egypt rose for the first time in eight months in April and reached its highest level since August 2015, a survey said on Sunday.
Emirates NBD's Emirates Purchasing Managers' Index (PMI) for the non-oil private sector strengthened from 49.9 in March to 50.8 in April, breaking the 50 mark between growth and contraction for the first time since last August.
The April reading was the highest for over three and a half years and only the sixth reading in positive territory since. Analysts have largely linked the improvement in global trading conditions to "a larger market movement and an increase in demand," says the PMI report.
A sub-index of production also resumed its expansion, from 49.9 in March to 51.1 in April. The recovery came after last month's sharp rise of more than three points, which reached its highest level since August.
"The improvement from the first quarter – the average PMI was only 48.9 between January and March – was broad, with most sub-components of the index posting positive values. more than 50, "said Daniel Richards, an economist at MENA at Emirates NBD.
The production sub-index was positive for the first time since November 2017 ", as companies have noticed stronger demand and a positive reading of new orders for the second consecutive month augurs well for the persistence of subsequent readings." Richards said.
New export orders remained in contraction, but fell from 46.8 in March to 48.9 in April. It was the slowest contraction since December. "Some companies have noted a lack of new overseas contracts and a refocus on domestic sales," the report says, while "others have seen increased demand for new markets such as the United States. Italy, Turkey and Japan ".
Confidence in future production improved compared to March and reached its second record in 12 months. The companies said "that new projects, increased tourism and expansion into new foreign markets are likely to stimulate business activity," the report says.
"With input prices rising faster than those of March, corporate margins will be negated by continued price reductions," said Richards. "Nevertheless, they seem more confident about future conditions."
"This renewed optimism is reflected in their hiring, with jobs posting a value above 50.0 – albeit marginal – for the first time since 2015." (Report by Yousef Saba, edited by Ros Russell)
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