Egypt Non-Oil Private Sector Downturn Softens

The S&P Global Egypt PMI rose to 47.1 in May 2026 from 46.6 in April, signalling a slower deterioration in non-oil private sector conditions. Manufacturing and construction returned to growth, while inventories rose at the fastest pace in nearly three years. Despite these improvements, inflationary pressures intensified, with input costs rising at the fastest pace since January 2023 due to higher fuel and electricity prices, currency weakness, and stronger wage pressures. Supply chain conditions also worsened, with delivery times lengthening at the fastest pace in nearly four years amid shipping disruptions and Middle East tensions. Firms responded by cutting jobs at the fastest rate since June 2020 as weak demand and rising costs weighed on activity. Looking ahead, business confidence improved to its highest level since August 2024 on hopes of improved economic conditions and exchange rate stability, despite persistent inflation concerns.

The S&P Global Egypt PMI fell to 46.6 in April 2026 from 48.0 in March, marking a sharper deterioration in non-oil private sector conditions and the steepest rate of contraction since January 2023. Both output and new orders declined significantly amid persistent cost pressures and softer demand. Input costs rose at the fastest pace since January 2023, driven by higher fuel and material prices linked to Middle East tensions. In response, firms cut purchasing and reduced headcount to contain costs. Order books contracted sharply, pulling down output, while weak demand was broad-based, especially in manufacturing and wholesale & retail. On the cost front, selling prices rose at the strongest pace since August 2024 as firms passed on higher costs despite weak demand. Meanwhile, purchasing activity fell and input orders were reduced, reflecting softer sales and tighter operating conditions. Looking ahead, business confidence remained subdued regarding year-ahead output.

The S&P Global Egypt PMI fell to 48.0 in March 2026 from 48.9 in February, marking the lowest reading since April 2024. Non-oil private sector activity extended its recent decline, broadly in line with the survey’s long-run average of 48.2, as output and new orders dropped at the fastest pace in near two years amid the Middle East war, which dampened demand and fueled price pressures. Purchasing levels edged up after two monthly reductions, while employment stabilized following job cuts late last year. On prices, input cost inflation accelerated to the joint-sharpest in 18 months, driven by higher fuel and input prices linked to the war and a stronger US dollar. Selling prices rose at the steepest rate since May 2025, though increases remained modest and near the long-run average. Looking ahead, business confidence fell for the first time in the survey’s history, though pessimism was mild, with only a few firms citing war-related uncertainty as the reason for negative forecasts.