Egypt’s Non-Oil Private Sector Faces Further Decline as PMI Falls to 48.8 in June

Egypt’s non-oil private sector saw a continued downturn in June, with business conditions deteriorating for the fourth consecutive month, according to the latest S&P Global Purchasing Managers’ Index (PMI) data. The PMI dropped to 48.8, down from 49.5 in May, remaining below the neutral 50.0 threshold that separates growth from contraction.

The decline was primarily driven by weakening demand and a sharp drop in new orders and output. Purchasing activity saw its steepest decline in nearly a year, reflecting deepening challenges across the sector. David Owen, economist at S&P Global Market Intelligence, noted that “the mild decline in non-oil sector health” was linked to ongoing reductions in both output volumes and incoming new orders.

Business sentiment also took a hit, with expectations for future activity falling to the lowest level on record. This pessimism stems from subdued forecasts for new orders and heightened concerns over regional geopolitical instability, which could pose additional economic risks.

Employment levels continued to slip, marking the fifth straight month of job losses. However, the rate of workforce reduction remained marginal. Despite these setbacks, one silver lining emerged: input cost pressures eased in June, leading to a slower pace of output price increases. This offered slight relief to firms grappling with inflation.

The sustained contraction highlights the fragility of Egypt’s private sector recovery, especially outside the oil industry. With confidence at a record low and demand softening, businesses may continue to face headwinds unless broader economic conditions stabilize. The PMI figures signal an urgent need for supportive measures to revive business sentiment and stimulate growth in Egypt’s non-oil economy.