(Bloomberg) --

Business activity in Egypt rebounded in June even as job losses accelerated in an economy just emerging from the coronavirus lockdown.

A measure of conditions in the non-oil private sector bounced back to the highest in four months thanks to slower rates of decline in new business and activity, according to IHS Markit. Its Purchasing Managers’ Index for Egypt rose to 44.6 in June from 40.7 in May, remaining below the threshold of 50 that separates growth from contraction.

“June’s PMI data gave some promising signs that the Egyptian economy is beginning to stabilize,” David Owen, economist at IHS Markit, said in a report on Monday.

A turnaround from April’s record low is gaining momentum in Egypt, with many restrictions recently lifted as the coronavirus outbreak shows signs of stabilizing. Still, rising cost pressures at Egyptian firms forced them to adjust by reducing employment at the quickest rate in nearly four years, according to IHS Markit.

• While firms cut wages for the third month in a row, optimism for future activity reached the highest so far this year; backlogs of work increased at the fastest in the series history
• Curfew hours and delays at port customs put pressure on delivery times, which grew longer for the fourth month in a row and at the joint-quickest rate since October 2017
• Companies saw an uptick in purchase cost inflation that was the biggest in nine months, linked in part to an increase in prices for medical materials and a stronger dollar

“Employment numbers still fell at an accelerated rate in June, although multiple signals suggest this will soon change,” Owen said. “Higher demand at some companies, increased backlogs and sentiment rising to a six-month high all point to firms hopefully restarting hiring in the near future.”

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