Cairo - Mubasher: The headline seasonally adjusted S&P Global Egypt Purchasing Managers’ Index (PMI) declined to 48 in March 2026 from 48.9 in February, marking its lowest level in nearly two years, according to the latest PMI data.
The reading remained below the 50.0 neutral threshold, signaling a continued contraction in non-oil private sector activity.
Moreover, the downturn is the strongest recorded since April 2024, although broadly in line with the long-run average of 48.2.
Business activity weakened for the fourth consecutive month, mainly due to the Middle East war. The decline in output and sales was observed across multiple sectors, with manufacturers particularly affected by rising input costs, recording the steepest increase among monitored industries.
New orders contracted at a sharper pace when compared to February, reaching their lowest level in almost two years, as businesses reported weakened client demand amid heightened uncertainty and increasing costs.
On the cost front, average purchase prices rose sharply in March, with the inflation accelerating to one of the fastest rates in one-and-a-half years. Firms attributed this to higher fuel and material costs, as well as the strengthening of the US dollar.
Hence, firms hiked their selling prices at the fastest pace in ten months, although the increase remained modest and broadly aligned with historical trends.
The purchasing activity increased slightly after two consecutive months of decline, while the employment levels stabilized following a period of job cuts at the end of 2025.
Expectations for future activity deteriorated, as firms turned pessimistic about the outlook for the first time on record, citing ongoing uncertainty related to geopolitical tensions. However, the degree of pessimism remained mild.
David Owen, Senior Economist at S&P Global Market Intelligence, said: “While the Egypt PMI fell to a 23-month low and panel members signalled that the Middle East war had weakened demand, the latest figure of 48.0 still relates to annual GDP growth of around 4.3%.”
“Input prices increased sharply in March, with panellists citing both commodity price increases linked to the war and a weaker pound against the US dollar. As the US dollar strengthens amid a flight to safety, and energy prices remain elevated, Egyptian companies are clearly feeling the impact on their balance sheets,” Owen added.
