War Impact on Egypt’s Private Sector: What the PMI Near Two-Year Low Means for Investors and Entrepreneurs
CAIRO: Egypt’s non-oil private sector experienced its most significant decline in nearly two years in March, as the ongoing Middle East conflict resulted in rising costs and weakened client demand, according to a key business survey released Sunday.
The S&P Global Egypt Purchasing Managers’ Index (PMI) dropped to 48.0 in March from 48.9 in February, marking its lowest reading since April 2024 and marking the fourth consecutive month below the 50.0 mark that separates economic growth from contraction. Despite this decline, the index remains close to its long-term average of 48.2.
The contraction was primarily driven by declines in output and new orders, both of which fell to their lowest levels in nearly two years. Many businesses attributed reduced client demand to the impact of the Middle East war, which has also intensified price pressures across the sector.
For the first time, business sentiment regarding the next 12 months turned negative. Companies cited uncertainty stemming from the conflict as a primary cause for their cautious outlook, though the overall level of pessimism was described as mild.
David Owen, Senior Economist at S&P Global Market Intelligence, highlighted that the current PMI reading of 48.0 corresponds to an annual GDP growth rate of around 4.3%. He added that recent data indicate the domestic non-oil sector remains on a fundamentally solid growth trajectory.
Nevertheless, cost pressures continue to pose significant challenges. Input prices rose at their fastest pace in 18 months due to increases in fuel and other commodities linked to the war, compounded by a stronger US dollar. In response, companies raised their selling prices at the quickest rate in 10 months, although the overall increase was modest.
— رويترز
تحليل خاص من عمانت | تصفح سوق عُمان
Egypt’s non-oil private sector slowdown, driven by Middle East conflict-related cost pressures and weakened demand, signals heightened regional economic uncertainty and supply chain risks. بالنسبة للشركات في سلطنة عمان، يؤكد هذا على ضرورة diversify markets and manage inflationary pressures carefullyينبغي على المستثمرين الأذكياء أن يأخذوا في الاعتبار cautious positioning with a focus on resilient sectors and inflation-hedging strategies to navigate potential spillovers from regional instability.
