War weighs on Egypt’s private sector as PMI hits near two-year low in March

Egypt’s non-oil private sector deteriorated at its sharpest pace in almost two years in March, as the Middle East wardrove ​up costs and dampened client demand, a closely watched ‌business survey showed on Sunday.

The headline S&P Global Egypt Purchasing Managers’ Index fell for a fourth consecutive month, dropping to 48.0 in March from ​48.9 in February — its lowest reading since April 2024.

The ​figure remained below the 50.0 threshold that separates growth ⁠from contraction, though it was broadly in line with the ​survey’s long-run average of 48.2.

Output and new orders were the chief ​drags on the index, with both measures also hitting their lowest levels for nearly two years.

Firms frequently blamed the Middle East conflict for ​dampening client demand, partly through intensifying price pressures.

In a first, ​business expectations for the coming 12 months slipped into negative territory, with companies ‌citing ⁠uncertainty over the war as a key reason for pessimism, though the degree of gloom was described as mild.

David Owen, senior economist at S&P Global Market Intelligence, nevertheless noted that “the latest ​figure of 48.0 ​still relates to ⁠annual GDP growth of around 4.3%,” adding that “recent data suggests the domestic non-oil sector is on ​a solid underlying growth path.”

Cost pressures remained a ​serious ⁠concern, however. Input prices surged at their joint-sharpest pace in one-and-a-half years, as firms cited fuel costs and other war-related commodity price ⁠increases, ​compounded by a stronger U.S. dollar.

In response, ​companies raised their selling prices at the fastest rate in 10 months, though ​the increase remained modest overall.