Non-oil private sector activity sees modest decline in June

Non-oil private sector activity continued to decline for the fourth consecutive month in June, with rates of decline in new orders and output accelerating, resulting in the sharpest reduction in purchasing in 11 months, according to S&P Global’s latest Purchasing Managers Index (PMI) report (pdf) for Egypt. The country’s headline figure dropped to 48.8 in June from 49.5 in May, to remain below the 50.0 mark that separates growth from contraction.

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“June PMI data pointed to another mild decline in the health of the non-oil sector, driven by sustained decreases in incoming new orders and output volumes,” S&P Global Senior Economist David Owen said.

New orders and overall output continued to decline during the month, with contraction accelerating. Although the pace of decline quickened, it was modest overall, according to the report. On the bright side, input cost pressures eased in June, leading to a slower rise in output prices.

Firms continued to reduce their input purchases for the fourth consecutive month, with manufacturers seeing the largest cutbacks out of the main sectors monitored by the survey. “The sharper decline in buying levels meant that total inventories stalled in June after increasing marginally in each of the prior three months. There was nevertheless a degree of pressure on suppliers, as highlighted by a slight lengthening of delivery times for the second month running,” the report read.

June’s data also showed continued weakness in employment, with firms reducing their workforce for the fifth consecutive month, mainly due to the “weaker demand.” Firms also showed limited optimism about the year-ahead outlook in June, generally anticipating no growth in output, with “activity expectations in fact dropping to a historic low,” according to the report. “A faster drop in input purchases combined with stalling hiring activity suggests that firms expect demand to remain low and are thereby looking to make cost savings,” Owen noted.

Geopolitical fears cloud business outlook: “Overall expectations for future activity were the lowest ever recorded in June, with the respective index having hovered close to all-time lows in 2025 so far,” Owen said. This “downbeat sentiment reflects subdued hopes for order books, as well as concerns that geopolitical risks could cause greater economic disruption,” he added.

Others share this view: “Egypt’s PMI reading was expected to remain below the 50.0 threshold in June,” Thndr Securities Brokerage’s Amr El Alfy told EnterpriseAM. “Unfavorable geopolitical conditions in June likely caused the headline PMI to drop below the previous month’s level. This may have affected the firms’ sentiment regarding increasing production in anticipation of inflation slowing down,” El Alfy told us.

The global press also covered the report: Reuters.