CAIRO – Egypt’s non-oil private sector expanded in January, marking its best performance in over four years and its first growth since August, as both output and sales volumes increased, according to a business survey released Tuesday.
S&P Global’s headline Purchasing Managers’ Index (PMI) climbed to 50.7 in January, up from 48.1 in December, signaling renewed growth in the sector at the start of 2025. A PMI reading above 50.0 indicates expansion, while below that level suggests contraction.
Best Performance Since 2020
January’s PMI reading was the highest since November 2020, driven by improving domestic market conditions and easing cost pressures, which helped boost sales. However, concerns over the sustainability of this upturn weighed on business expectations and hiring.
“The ceasefire deal between Israel and Hamas likely added confidence to markets in January,” said David Owen, Senior Economist at S&P Global Market Intelligence. “That said, business expectations for the next 12 months remain subdued, showing that firms are still uncertain about economic stability over the longer term.”
Output and Orders Rebound
- Output sub-index: 51.1 (up from 47.1 in December)
- New orders index: 51.3 (up from 46.4)
Despite this positive start to the year, firms remained cautious about future activity, with expectations slipping to near historic lows. While employment levels stabilized after two months of job cuts, hiring remained limited.
The sub-index for expected future output fell to 52.8 from 53.8 in December, reflecting lingering uncertainty.
Easing Cost Pressures
Cost pressures eased to an eight-month low, with input prices rising at a slower pace. This allowed firms to increase output prices only slightly—the softest rise in four-and-a-half years.
While purchase costs declined in the construction sector, inflation slowed across other industries compared to December.
Egypt’s private sector now looks ahead with cautious optimism, balancing newfound growth with ongoing economic uncertainties.
