Egypt's business activity falls in July as production drops

Business activity in Egypt's private sector, excluding oil, shrank in July, with modest declines in output, new orders, and employment, a survey showed on Tuesday.

The Emirates NBD Egypt Purchasing Managers' Index dipped to 49.2 in July from 50.2 the previous month. A reading above 50 indicates expansion and below 50, contraction.

The previous month's PMI had been the first expansion after five consecutive months of contraction.

"The drop in July's survey came in below expectations, and hence raises the possibility that Egypt's macroeconomic recovery may have stalled at the start of FY2015/16," Emirates NBD economist, Jean-Paul Pigat, said.

New export business declined for the second time in three months, compounding softened demand. Respondents said a lack of stability in major export markets across the Middle East led to a decline in new work from abroad.