{"id":671361,"date":"2025-09-07T00:00:00","date_gmt":"2025-09-07T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/09\/07\/non-oil-private-sector-activity-contracts-further-in-august-2\/"},"modified":"2025-09-07T00:00:00","modified_gmt":"2025-09-07T00:00:00","slug":"non-oil-private-sector-activity-contracts-further-in-august-2","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/09\/07\/non-oil-private-sector-activity-contracts-further-in-august-2\/","title":{"rendered":"Non-oil private sector activity contracts further in August"},"content":{"rendered":"

Egypt saw its n<\/strong>on-oil private secto<\/strong>r activity contract further in August<\/strong>, with output and new orders volumes dropping for the sixth consecutive month, 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 recorded 49.2, marking a slight acceleration in contraction from<\/strong> July\u2019s 49.5<\/a><\/strong>, but still above the survey\u2019s historical average of 48.2.<\/p>\n

REMEMBER-<\/strong> The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.<\/p>\n

Output and new orders declined for the sixth straight month<\/strong>, directly driven by subdued customer demand, which firms attributed to weak economic conditions and concerns about inflation. Although the rate of decline was faster than in the previous month, it remained slower than their long-run averages. Despite this decline, the new export sub-index increased and suggests that the weaker EGP is benefiting the country\u2019s export sector, Capital Economics\u2019 James Swanston wrote in a recent research note seen by EnterpriseAM.<\/p>\n

Firms scale back on purchasing even as hiring rises: <\/strong>In contrast with rising employment, firms remained cautious with their purchasing habits. Input purchases fell for the sixth month in a row, leading to a further reduction in stocks.<\/p>\n

\u201cEmployment was also up for the second consecutive month<\/strong>, after a lack of hiring in the first half of the year. However, staffing gains were only mild, while firms remained reluctant to commit to new purchases, particularly as confidence in the year-ahead outlook remains weak,\u201d S&P Global Senior Economist David Owen wrote.<\/p>\n

Cost pressures moderated in August: <\/strong>Input cost inflation slowed to its weakest pace since March, reaching one of the lowest levels recorded in the last four-and-a-half years. Firms cited increasing import costs and rising staff salaries as the main drivers. \u201cThis adds to our view that headline inflation will fall in the coming months, paving the way for further monetary loosening,\u201d Swanston noted.<\/p>\n

Businesses raised their selling prices at the fastest rate since May<\/strong>, which narrowed the gap between input and output price inflation to its smallest in five months. This signals that firms were in a better position to maintain their profit margins during the month. <\/p>\n

Future outlook stays muted despite easing costs:<\/strong> \u201cWhen assessing the year-ahead outlook, Egyptian non-oil companies remained relatively subdued,\u201d the report read, adding that \u201cthe degree of optimism was unchanged from July and only marginally higher than June's record low.\u201d<\/p>\n

ELSEWHERE IN THE REGION-<\/strong><\/p>\n