Key insights
- Egypt's non-oil private sector contracted for the fifth straight month in May, with the PMI at 47.1. Rising costs, driven by fuel, electricity, and currency depreciation, are pressuring businesses. This led to accelerated employment cuts and the fastest increase in selling prices in the survey's history. Supply chain disruptions also worsened. While business confidence improved, the persistent contraction and cost pressures suggest ongoing economic challenges that could have minor spillover effects globally through supply chains and commodity prices.
Investing.com -- Egypt’s non-oil private sector contracted for the fifth consecutive month in May as rising costs limited demand, according to S&P Global’s Purchasing Managers’ Index released today.
The headline PMI rose to 47.1 in May from 46.6 in April, remaining below the 50.0 mark that separates growth from contraction. The reading pointed to weaker GDP growth in the second quarter compared to late 2025.
New orders fell for the fifth month in a row, with the decline staying close to April’s 37-month low. Companies reported that high inflation discouraged customers from placing orders.
Input costs jumped at the fastest rate since January 2023, with nearly half of surveyed firms reporting higher expenses. The increases came from diesel and fuel prices, electricity costs, currency depreciation, and wages, which rose at their strongest pace since January 2018.
Companies raised their selling prices at the second-highest rate in the survey’s history as they worked to protect profit margins. Output prices had risen more moderately in March and April.
Employment cuts accelerated to the fastest pace since June 2020. Firms reported both leaving vacant positions unfilled and making active redundancies as sales declined and costs increased.
Supply chain problems worsened, with delivery times lengthening at the quickest pace in nearly four years. Companies cited shipping route disruptions and supplier reluctance amid price volatility related to the Middle East conflict.
Firms reduced purchasing activity slightly but increased inventories at the fastest rate in nearly three years to prepare for future price increases. Backlogs of work grew at the quickest pace since September 2023 due to workforce reductions and supply difficulties.
Business confidence improved to its highest level since August 2024. Companies expressed hope for better economic conditions and currency recovery, though inflation concerns remained.
The survey collected data from around 400 private sector companies between May 12-20.
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