Egypt’s non‑oil private sector deteriorated sharply in March 2026, with the S&P Global PMI sliding to 48.0, its lowest reading in nearly two years, marking the fourth consecutive monthly decline and underscoring persistent headwinds outside the energy sector.
Firms cited rising input costs, particularly for fuel and imports, partly driven by the ongoing Middle East conflict, as key factors behind deteriorating activity and dampened demand. Input prices rose at their fastest pace in more than a year, squeezing profit margins and prompting some companies to boost selling prices modestly.
Output and new orders both hit near two‑year lows, reflecting weakening client demand at home and abroad. For the first time, business expectations for the next 12 months turned negative, with companies citing uncertainty over geopolitical developments as a major concern.
Despite the contraction in the non‑oil sector, underlying economic indicators still suggest some resilience. Senior economists noted that the PMI level corresponds with annual GDP growth of around 4.3%, signalling that broader macroeconomic growth may remain intact even as private‑sector sentiment weakens.
The ongoing downturn raises questions about the strength of Egypt’s economic recovery. Continued external pressures, especially volatile energy markets and war‑driven supply disruptions, could slow investment and job creation, complicating government efforts to sustain economic stability and growth.
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