CAIRO, Feb 3 – Egypt’s non-oil private sector recorded its third consecutive month of output growth in January, the longest expansion streak since late 2020, even as demand conditions showed signs of softening, according to data released by S&P Global.
The headline seasonally adjusted Purchasing Managers’ Index slipped to 49.8 in January from 50.2 in December, indicating a marginal deterioration in overall business conditions. A reading below 50 signals contraction, while levels above 50 indicate expansion.
Despite the slight dip, the PMI remained above its long-term average, pointing to a still-robust pace of non-oil economic activity. Output continued to rise, supported largely by stronger foreign demand, while domestic sales edged lower after two months of growth.
A sharp decline in backlogs of work, the fastest reduction in nearly three years, prompted firms to cut staffing levels. Employment fell at the steepest pace since October 2023, reflecting weaker pipeline demand and more cautious hiring decisions.
David Owen, senior economist at S&P Global Market Intelligence, said the rapid fall in backlogs suggests firms may have less scope to expand activity in the months ahead.
Cost pressures also eased, allowing companies to reduce selling prices for the first time since mid-2020. The decline in prices highlights improving input conditions but also reflects softer demand dynamics.
Looking forward, business sentiment remained only marginally positive. Firms expressed cautious optimism about activity over the next 12 months, balancing improved cost conditions against uncertainty around demand strength.
