Egypt’s non-oil private sector contracts in December as cost pressures rise, PMI shows

CAIRO: Operating conditions in Egypt’s non-oil private sector deteriorated in December, with output and new orders falling at the sharpest rates in eight months amid rising cost pressures, S&P Global reported on Monday.

The headline S&P Global Egypt Purchasing Managers’ Index (PMI) dropped to 48.1 in December from 49.2 in November, its fourth consecutive month of contraction.

A reading below 50 indicates a decline in activity. The downturn was attributed to subdued client demand and increased inflationary pressures, exacerbated by a weakening Egyptian pound against the US dollar.

“The latest Egypt PMI data showed that the non-oil private sector’s anticipated recovery is unlikely to be without its setbacks in 2025,” said David Owen, senior economist at S&P Global Market Intelligence.

Businesses faced higher prices and a slump in demand, leading to the fastest decline in operating conditions since last April, he added.

Employment levels fell for the second month in a row, although the reduction was slight.

Rising salary costs, linked to cost-of-living challenges, contributed to the decline in job numbers. Input cost inflation accelerated, driven by higher material prices and an appreciating US dollar.

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Despite this, firms were less inclined to raise their own charges, tightening margins to maintain orders. Non-oil companies were more optimistic about future activity, hoping for improved domestic and geopolitical conditions in 2025.

The future output sub-index rose to 53.8 from 50.5 in November.

Concerns about exchange rate volatility and price instability, however, could temper demand in the near term.