Ahmed Kamel – Egypt Daily News
Egypt’s non-oil private sector recorded its strongest quarterly performance in more than five years at the end of 2025, according to the latest Purchasing Managers’ Index (PMI) data released by S&P Global, signaling a sustained improvement in business conditions after a prolonged period of weakness.
The PMI stood at 50.2 points in December 2025, down slightly from 51.1 in November, which marked a 61-month high. Despite the modest decline, the index remained above the 50-point threshold that separates contraction from expansion for the second consecutive month, indicating continued improvement in operating conditions across the non-oil economy.
S&P Global said December’s reading represents only the second consecutive improvement in more than five years. Historically, a PMI level of around 50.2 has been associated with annual real GDP growth of close to 5 percent. The survey data were collected between December 4 and 15, and the index is seasonally adjusted, with readings above 50 signaling monthly expansion.
The report showed that business conditions continued to improve on the back of rising new orders for a second straight month, leading to a modest expansion in output. However, the pace of growth slowed compared with November. Manufacturing and construction sectors recorded increases in production, while wholesale and retail trade and services experienced a decline, highlighting uneven momentum across the economy.
Improved demand and output encouraged non-oil firms to increase purchasing activity for the first time in ten months, a development viewed by analysts as a sign of growing confidence. At the same time, some companies reported supplier shortages, contributing to a third consecutive monthly decline in input inventories.
Employment, however, remained a weak spot. The survey indicated a renewed decline in staffing levels in December, with many firms citing difficulties in replacing employees who had left their jobs. Although the drop in employment was the sharpest in 13 months, it remained relatively moderate overall.
On the cost side, input price pressures stayed below their long-term average, despite ticking up slightly from November’s record low. Companies reported higher costs for items such as fuel, cement and wages, but these increases translated into only marginal rises in average selling prices, suggesting that inflationary pressures remain contained.
David Owen, Chief Economist at S&P Global Market Intelligence, said Egyptian businesses ended 2025 on a stronger footing. He noted that when December’s results are combined with data from October and November, they point to the best quarterly performance since the final quarter of 2020.
Owen attributed much of the recent strength to improving demand conditions, supported by easing inflationary pressures in the Egyptian economy. This environment, he said, has allowed both businesses and consumers to spend with greater confidence. The return to growth in input purchasing for the first time in nearly a year also suggests that the recovery is becoming more broad-based.
At the same time, he cautioned that the overall improvement in business conditions was weaker in December than in the previous month, urging caution in interpreting the momentum. Persistent uncertainty at both the domestic and global levels has led many companies to remain guarded in their outlook for the months ahead.
S&P Global emphasized that PMI data are released more quickly than official GDP figures, making them a valuable leading indicator of economic activity. As such, the latest readings provide early evidence that Egypt’s private sector entered 2026 with greater resilience, even as challenges and risks continue to shape the broader economic landscape.
