CAIRO (Reuters) – Business conditions in Egypt’s non-oil private sector worsened in December, with output and new orders falling at their steepest rates in eight months amid mounting cost pressures, S&P Global reported on Monday.
The main S&P Global Egypt Purchasing Managers’ Index (PMI) fell to 48.1 in December from 49.2 in November, its fourth consecutive month of decline. A reading below 50 indicates a decline in activity.
The decline was attributed to reduced customer demand and increased inflationary pressures, exacerbated by the weakening of the Egyptian pound against the US dollar.
“The latest PMI data in Egypt showed that the expected recovery of the non-oil private sector is unlikely to be without a hitch in 2025,” said David Owen, senior economist at S&P Global Market Intelligence.
Businesses faced higher prices and falling demand, leading to the fastest decline in working conditions since last April, he added.
Employment levels fell for the second month in a row, although the decline was slight. Rising wage costs, coupled with cost-of-living challenges, contributed to job cuts.
Input cost inflation accelerated, driven by higher material prices and the appreciation of the US dollar. Even so, companies have been less inclined to raise their own fees, cutting margins to maintain orders.
Non-oil companies were more optimistic about future activity, hoping for improved domestic and geopolitical conditions in 2025. The future production sub-index rose to 53.8 from 50.5 in November. Concerns about exchange rate volatility and price volatility, however, could dampen demand in the short term.
