How Egypt and Lebanon’s non-oil private sectors fared in April: Purchasing manager indices (PMI) tracking non-energy sectors saw both Egypt and Lebanon’s non-oil private business activity remaining in contraction in April, with the latter inching closer to the 50.0 mark threshold, while Egypt fell deeper into the red.

REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

EGYPT-

Egypt’s non-oil private sector continued to decline in April, which non-oil firms attributed to declining demand amid weaker consumer spending, according to S&P Global’s latest Purchasing Managers Index (PMI) report (pdf). Egypt’s headline figure fell 0.7 percentage points to 48.5 in April, down from 49.2 in March, marking the lowest PMI reading for the country in 2025 so far.

New orders and overall output were both down: The new orders sub-index fell to 47.24, down from 49.0 in March, with businesses reporting a drop in customer spending leading to lower intakes of new business, Reuters reports. This, in turn, led to a reduction in output, with the output subindex dipping to 47.4, down from 48.6 previously, Reuters says. Rates of contraction for both new orders and output were at their lowest level in four months.

Input purchases were also down as a result, with lower levels of activity spurring the most marked decrease in purchasing activity since last October. Meanwhile, employment saw a decline for the third consecutive month, with firms looking to limit their hiring activity and their headcount amid subdued activity.

The effect of rising fuel prices is starting to show: Input prices rose at their highest level in four months in April, with panelists indicating that this was down to an increase in fuel prices, as well as higher material and staff costs. However, this did not reflect on output prices, which remained unchanged during the month. “Although input costs rose at a much sharper pace over the month, this was mainly attributed to the roughly 15% uplift in fuel prices, rather than underlying inflationary pressures," S&P Global Senior Economist David Owen said.

It’s not all doom and gloom for businesses: “Non-oil firms were more confident about future activity in April, with optimism ticking up to a three-month high, although the level of confidence remained subdued in comparison to the long-run trend. Firms with a positive outlook generally hoped that market conditions at home and abroad would strengthen,” the report reads.

LEBANON-

Lebanese non-energy private sector growth continued to contract — albeit at a slower pace than last month — as new orders and business activity continued to dwindle, according to Blominvest Bank’s Lebanon PMI (pdf). The nation’s headline figure came in at 49.0, up from 47.6 in March, in what is the nation’s second month in the red following its two-month streak in expansion territory.

New orders continued to slow, due to a combination of stagnant market conditions, security concerns, regional instability and weakening customer purchasing power, according to the report. This was also seen in new export orders, which also saw a slower rate of decline compared to March.

Geopolitical strife is slowing down business activity: “The debate regarding the surrendering of Hezbollah’s weapons escalated in the last couple of weeks as some of Hezbollah’s leaders stated that no one can forcefully remove their weapons. In the meantime, Israel’s breaches of the ceasefire agreement continue. This stalemate is having negative effects on business activity in the short-run, despite the progress made on the enacting of laws essential for financial restructuring,” Blom Senior Research Analyst Helmi Mrad said.

Firms’ purchasing activity was also down in April — albeit only marginally — as part of efforts by companies to “maintain lean stocks.” The figures also revealed the first m-o-m decrease in firms' stock of items such as raw materials and intermediate goods since last November. There was also a slight decrease in employment during the month. Meanwhile, output prices were on the rise, marking the eleventh consecutive monthly increase in prices despite input price inflation softening to a three-month low.

Businesses’ confidence is starting to shake: “For the first time since November last year, private sector firms in Lebanon were, on balance, pessimistic towards the 12-month outlook for activity. This marked a considerable turnaround from January's record level of optimism. Security concerns, political uncertainty and expectations of weak demand, particularly from overseas, were cited by panellists,” the report reads.

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