Egypt’s non-oil private sector experienced its sharpest downturn in nearly two years in March, as the Middle East conflict drove up costs and weakened demand, according to a closely watched business survey released on Sunday.
The headline S&P Global Egypt Purchasing Managers’ Index fell for the fourth consecutive month, dropping to 48.0 in March from 48.9 in February—its lowest level since April 2024.
The reading remained below the 50.0 mark that separates growth from contraction, though it was broadly in line with the long-term average of 48.2.
Declines in output and new orders were the main factors dragging down the index, with both indicators hitting their weakest levels in nearly two years. Many firms attributed the slowdown to the Middle East conflict, which has dampened client demand and intensified price pressures.
For the first time, business expectations for the next 12 months turned negative, as companies cited uncertainty surrounding the war. However, the overall level of pessimism was described as relatively mild.
David Owen, senior economist at S&P Global Market Intelligence, noted that despite the weak PMI reading, it still corresponds to annual GDP growth of around 4.3%. He added that recent data suggests the non-oil sector retains a fundamentally stable growth trajectory.
Cost pressures remain a major concern. Input prices rose at one of their fastest rates in the past 18 months, driven by higher fuel costs and increases in other commodities linked to the war, alongside a stronger U.S. dollar.
In response, businesses raised their selling prices at the quickest pace in 10 months, although the overall increase remained moderate.