Egypt's non-oil private sector remained mired in contraction in May, as a fresh surge in input costs squeezed demand, forced businesses into aggressive price hikes and triggered the steepest round of job cuts in nearly six years, a business survey showed on Wednesday. The headline S&P Global Egypt Purchasing Managers' Index ticked up to 47.1 in May from 46.6 in April, but remained beneath the 50.0 no-change mark for a fifth consecutive month, pointing to a softer pace of GDP growth in the second quarter than at the end of 2025. "Job cuts ... accelerated to their fastest pace since June 2020, with firms commenting on both active redundancies and decisions to leave vacant positions unfilled," said David Owen, senior economist at S&P Global Market Intelligence. Amid shipping disruptions tied to the Middle East conflict, supply chains deteriorated sharply, with delivery times lengthening at the fastest pace in almost four years. Input price inflation accelerated for a fourth straight month to its highest level since January 2023, driven by costlier fuel and electricity, a weaker pound that lifted import bills, and the strongest wage pressures since January 2018. Companies passed those costs on through a near-record increase in selling charges, while new orders fell for a fifth month running close to April's 37-month low. Even so, business confidence climbed to its highest level since August 2024, with firms pinning hopes on improving economic conditions and a recovery in the exchange rate against the dollar.
