{"id":669649,"date":"2025-08-06T00:00:00","date_gmt":"2025-08-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/08\/06\/non-oil-private-sector-contraction-eases-in-july-amid-signs-of-recovery\/"},"modified":"2025-08-06T00:00:00","modified_gmt":"2025-08-06T00:00:00","slug":"non-oil-private-sector-contraction-eases-in-july-amid-signs-of-recovery","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/08\/06\/non-oil-private-sector-contraction-eases-in-july-amid-signs-of-recovery\/","title":{"rendered":"Non-oil private sector contraction eases in July amid signs of recovery"},"content":{"rendered":"

Non-oil private sector activity <\/strong>declined for the fifth consecutive month <\/strong>in July<\/strong>, although the rate of decline eased from the prior month, with businesses reporting weaker rates of contraction in activity and new orders, according to S&P Global\u2019s latest Purchasing Managers Index report (pdf)<\/a>. <\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

The country\u2019s headline figure rose to 49.5 in July from 48.8 in <\/strong><\/a><\/strong>June<\/a><\/strong><\/a><\/strong>, inching closer to the 50.0 neutral threshold that separates growth from contraction. However, the index hit its joint-highest level in the past five months, reflecting only \u201ca marginal decline\u201d in the sector\u2019s health.<\/p>\n

New orders and overall output continued to contract during the month<\/strong>, but at softer rates. Although Egypt\u2019s July reading shows deteriorating non-oil business conditions, there is still reason for optimism, as the drop in sales was eased by many firms securing new work, S&P Global Senior Economist David Owen said.<\/p>\n

Meanwhile, input costs rose at a slower pace in July<\/strong>, with the acceleration led by an increase in purchase prices for items that include fuel, cement, and packaging. Firms also cited a mild increase in wages as a factor in the rise in input costs. \u201cThe concurrent increase in output prices was only slight, which should provide assurance that customers will not face large price swings in the near future,\u201d Owen said.<\/p>\n

Businesses continued to slash their input purchases for the fifth consecutive month<\/strong>, but at a much softer pace than June\u2019s 11-month record cutbacks. \u201cSupply chain conditions remained relatively stable, allowing firms to maintain stocks of purchases at broadly the same level as the month before,\u201d the report read.<\/p>\n

Employment is gaining momentum: <\/strong>\u201cBusinesses also had the confidence to hire new staff, leading to an increase in employment for the first time in nine months, if only a fractional one,\u201d Owen said.<\/p>\n

Business sentiment for the year ahead improved \u201conly slightly\u201d from June\u2019s record dip<\/strong>, but remained \u201chistorically subdued\u201d in July amid concerns from the surveyed companies about demand and wider economic uncertainty.<\/p>\n

Domestic demand lifts Egypt\u2019s PMI, but inflation risks loom: <\/strong>A dip in the new export orders, sub-component of the news orders, suggests that domestic demand led the improvement in our non-oil business activity, Capital Economics\u2019 James Swanston wrote in a research note seen by EnterpriseAM. However, Swanston warned that if July\u2019s rising input and output prices \u201ctranslates into inflation staying elevated in the coming months, the central bank may decide to keep the monetary easing cycle on pause for longer.\u201d<\/p>\n

ALSO FROM THE REGION-<\/strong><\/p>\n

Non-oil business activity across the region showed varying trends in July<\/strong>-<\/p>\n