Egypt’s non-oil private sector economy experienced a modest decline in September, with the S&P Global Egypt PMI falling to 48.8 from 49.2 in August, marking the lowest reading in three months.
The downturn was primarily driven by a steeper contraction in new sales, which fell at the fastest pace since April. Survey participants attributed the drop in orders to subdued economic conditions, rising prices, and greater wage pressures.
Business activity decreased for the seventh consecutive month, with the rate of decline accelerating to the strongest level in three months, though remaining moderate and below the long-run trend. The wholesale and retail sectors recorded the sharpest declines in sales, output, and purchases.
Employment growth stalled in September, ending a two-month period of job creation. Nearly all surveyed companies reported no change in their workforces, with many citing a lack of new work as reducing the need to hire staff. Business confidence also dipped to one of its lowest levels in the survey’s history.
On a positive note, input cost inflation eased to the slowest pace in six months, mainly linked to the Egyptian pound’s strengthening against the US dollar and its impact on import prices. However, staff costs increased at the fastest rate since May 2024.
Prices charged by businesses rose for the fifth consecutive month, though at a slightly slower pace than in August. Companies primarily implemented price increases to pass higher costs on to customers.
David Owen, Senior Economist at S&P Global Market Intelligence, noted that while companies are struggling to gain new work amid challenging market conditions, "they can take some comfort from a softening of input cost pressures, driven by the pound’s strengthening against the US dollar over recent months."
The PMI has remained below the 50.0 neutral mark for seven straight months, indicating ongoing contraction in Egypt’s non-oil private sector.