Egypt Private Sector Begins 2025 in Growth Mode – S&P
The Egyptian non-oil private sector began the year in growth mode, according to the latest S&P Global PMI® survey data, enjoying its best expansion for more than four years as output and sales volumes increased.
The first set of results for 2025 marked a notable rebound for the private sector economy, which has recorded a protracted slump for the last few years.
Surveyed firms widely signalled that a pick-up in domestic market conditions had driven sales higher, supported by a softening of cost pressures as some material prices fell.
This helped to cool the rate of output price inflation to its lowest in four and a half years. However, uncertainty over the longevity of the market upturn appeared to weigh on expectations and hiring.
At 50.7 in January, up from 48.1 in December, the headline PMI thereby signalled a renewed improvement in the health of the Egyptian non-oil economy at the beginning of the year.
Furthermore, the index was at its highest level since November 2020, having risen above the 50.0 neutral mark only twice in this period (the other being August 2024).
Four out of the five PMI sub-components offered a positive steer on the headline figure in January, the exception being employment as staffing was unchanged.
Total business activity and new orders rose modestly in January, with rates of growth the quickest observed in over four years. Panellists often signalled that an improvement in economic conditions and falling inflationary pressures had given clients greater confidence to place new orders.
This was the case in the manufacturing, construction and wholesale & retail sectors, according to granular data, while services was the only category to post lower sales.
Increased customer demand often led firms to expand their output. Purchases of inputs also rose, contributing to a fresh (albeit slight) increase in input inventories. Stable supply chains were also signalled, as delivery times were little changed since December.
After a two-month run of job cuts, total employment stabilised across the non-oil economy in January. Although some firms hired additional workers due to rising sales, this was countered by reductions elsewhere.
Overall input prices rose at a solid pace at the start of 2025. However, the rate of inflation softened markedly from December and was the weakest recorded for eight months. This was widely attributed to a slower uptick in purchase prices.
Whilst some respondents signalled greater cost pressures due to a stronger US dollar, others mentioned a reduction in material prices. The construction sector bucked the wider trend and recorded a fall in purchase costs over January.
Subsequently, non-oil firms raised their output prices only slightly in January. The increase was the softest observed in four-and-a-half years.
Despite business conditions improving, firms were restrained in their outlook of future activity in January, with expectations slipping from December to a historically low level. Interbank Rates Slow as Remita, FAAC Credits Boost Liquidity
