Egypt’s non-oil private sector saw a contraction in March, marking the first downturn of 2025 due to weakened demand, as reported by S&P Global on Thursday. The Purchasing Managers’ Index (PMI) fell to 49.2 from 50.1 in February, dipping below the 50.0 threshold that distinguishes growth from contraction.The decline in the PMI was primarily driven by a decrease in new orders, both domestically and internationally. This led firms to scale back on output, purchases, and staffing levels.
However, the construction sector emerged as a positive area, demonstrating robust growth in output and new work, in contrast to declines observed in the manufacturing and wholesale & retail segments.
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Mild contraction compared to historical trends
Despite the downturn, the contraction was mild and less severe than historical trends. Input costs increased at the slowest pace in nearly five years, partly due to a stabilised Egyptian pound against the US dollar. “Firms will be particularly buoyed by the improved picture for inflation,” stated David Owen, Senior Economist at S&P Global Market Intelligence.
Employment levels and future outlook
Employment levels fell slightly, although most firms maintained stable payrolls. Looking ahead, non-oil firms displayed subdued optimism, with output expectations reaching one of the lowest levels recorded in the survey’s history. Only 2 percent of firms reported a positive outlook, reflecting uncertainties surrounding the local economy and global trade dynamics.
