Egypt Non-Oil Private Sector Contraction Eases

The S&P Global Egypt PMI remained unchanged at 47.2 in October 2026, signaling a contraction in non-oil private sector activity for the tenth consecutive month. Output and new orders both declined at their fastest rates in four months, as weak client demand, reduced purchasing power, and ongoing Middle East conflict weighed on business activity. Employment also returned to contraction, ending a two-month period of job creation, while backlogs of work fell for the first time since January. Meanwhile, input cost inflation accelerated to a five-month high, driven by higher prices for imported materials, energy, and shipping, as well as currency depreciation. Consequently, firms raised selling prices at the fastest pace since June to pass on higher operating costs. Looking ahead, business confidence weakened further to a seven-month low, with firms expressing concerns over persistent inflation, geopolitical tensions, and supply chain disruptions.

The S&P Global Egypt PMI fell to 47.2 in September 2026 from 49.6 in August, signaling a renewed and accelerated deterioration in non-oil private sector conditions. Output and new orders both declined sharply, with weaker demand, geopolitical disruptions and elevated inflationary pressures weighing on business activity. Employment, however, increased for a second consecutive month, marking the first back-to-back rise in payrolls in more than a year. Meanwhile, purchasing activity contracted for a sixth straight month, while inventories fell for a third consecutive month as firms reduced input purchases. Cost pressures remained elevated, driven by higher oil, metals, electricity and transportation costs, prompting companies to raise selling prices strongly despite a slight easing in output price inflation. Business confidence remained positive but weakened from August’s more than four-year high amid concerns over weaker demand and ongoing geopolitical disruptions.

The S&P Global Egypt PMI rose to 49.6 in August 2026 from 46.8 in July, signaling the softest deterioration in operating conditions since January as the non-oil sector moved closer to stabilisation. Output and new orders declined at slower rates, with the fall in new business the least marked since February amid signs of improving market activity. Employment also increased for the first time since October 2025, with job creation reaching its second-fastest rate on record. However, purchasing activity contracted at the sharpest pace in nearly three years, as material shortages, cash-flow constraints, delayed payments, and Strait of Hormuz disruptions weighed on buying activity. Meanwhile, price pressures quickened for the first time since May, with both input costs and output charges rising at faster rates. Despite the challenges, business confidence climbed to its highest level since June 2022, supported by expectations of new projects, tourism expansion and branch openings.