Non-oil private sector shows strongest growth in over 4 years | PMI

Egypt's non-oil private sector saw significant expansion in January, marking its best performance in more than four years and its first growth since August, according to S&P Global’s latest Purchasing Managers' Index (PMI) report.

Fueled by increased output and sales volumes, Egypt’s PMI rose to 50.7 in January from 48.1 in December, reaching its highest point in 50 months - a PMI reading above 50 signals growth, while readings below that threshold indicate contraction.

Since November 2020, Egypt’s PMI has only recorded 50 or above twice – in August 2024 and now January 2025.

January's figure represents a notable rebound and suggests renewed confidence in Egypt's non-oil private sector as 2025 begins.

“Growth at the start of 2025 was welcome news for Egypt's non-oil private sector,” explained David Owen, senior economist at S&P Global Market Intelligence.

Owen pointed out that the ceasefire agreement between Israel and Hamas likely played a role in boosting market confidence.

Businesses remained cautious about future growth, as the sub-index for future output expectations fell to 52.8 from 53.8 in December.

Total business activity and new orders rose modestly in January, with rates of growth the quickest observed in over four years, S&P wrote.

The output sub-index rose to 51.1 from 47.1 in December, signaling growth in production levels. Similarly, the new orders index climbed to 51.3, up from 46.4 the previous month.

Cost pressures also eased, reaching an eight-month low, with input prices increasing at a slower pace. This moderation in costs allowed companies to raise output prices only marginally, marking the smallest increase in over four years.

In the construction sector, purchase costs declined, while other sectors saw slower inflation compared to December.

Although employment levels stabilized following two months of job cuts, hiring remained limited as businesses continued to take a cautious approach to future activity.