Egypt’s non-oil private sector showed signs of stabilizing in October 2025, with the slowest contraction in three months according to the latest S&P Global Purchasing Managers’ Index. The index climbed to 49.2 from 48.8 in September, still below the 50 mark that signals growth, but pointing to a milder decline in business activity amid improving domestic demand.
This uptick reflects a slight rebound in new orders and output, especially in manufacturing, while other areas like services and construction lag behind. The data comes as Egypt pushes economic reforms to boost non-oil growth and reduce reliance on energy exports.
Key PMI Highlights and Recent Trends
The October PMI reading of 49.2 marks the highest level since July 2025, when it hit 49.5. Although still in contraction territory, this figure beats the long-term average of 48.2, suggesting business conditions are easing up.
New business inflows dropped at the slowest rate in five months, driven by better momentum in local markets. Output also fell less sharply, with companies reporting fewer disruptions from supply chain issues.
Experts note this as a positive shift after a tough year. Earlier in 2025, the PMI dipped to lows around 47 in April due to global economic pressures and local currency fluctuations.
Here is a quick look at Egypt’s non-oil PMI over recent months:
| Month | PMI Value | Change from Previous |
|---|---|---|
| October 2025 | 49.2 | +0.4 |
| September 2025 | 48.8 | -0.2 |
| August 2025 | 49.0 | +0.5 |
| July 2025 | 49.5 | +0.7 |
| June 2025 | 48.8 | -0.5 |
This table shows a pattern of small fluctuations, with October bringing a modest gain.
Sector Performance Breakdown
Manufacturing stood out in October, posting a slight rise in new orders for the first time in months. This sector benefits from government incentives aimed at export growth, which have helped offset weaker demand in services and retail.
In contrast, construction and wholesale sectors saw ongoing declines, though at a reduced pace. Firms in these areas cited high input costs and competition from imports as main hurdles.
Overall, the non-oil economy contributes over 80 percent to Egypt’s GDP, making these PMI signals vital for tracking recovery. Recent reforms, including currency devaluation earlier in 2025, have aimed to attract foreign investment and stabilize trade.
Employment Gains and Cost Challenges
Employment in the non-oil sector grew for the third time in four months, a bright spot amid the slowdown. Companies added staff at a modest rate to handle steadier workloads, focusing on skilled roles in manufacturing.
However, input costs surged at the fastest pace since May 2025, fueled by rising wages and material prices. Wage inflation hit its highest mark since October 2020, putting pressure on profit margins.
Businesses absorbed most of these costs rather than passing them fully to customers, leading to a slight drop in selling price hikes. This approach helps maintain competitiveness but could strain finances if trends continue.
Some key factors influencing costs include:
- Higher global commodity prices affecting imports.
- Local wage demands amid inflation concerns.
- Supply chain delays from regional trade issues.
Expert Views on the Data
Senior economists highlight the improved domestic momentum as a step forward. They warn that persistent cost pressures might hinder progress if not managed well.
The data aligns with broader efforts to diversify Egypt’s economy away from oil dependency. With non-oil exports jumping 21 percent to 36.6 billion dollars in the first nine months of 2025, there’s growing optimism for sustained growth.
This PMI report follows similar positive signals in neighboring economies, like Saudi Arabia’s non-oil sector hitting a six-month high in October.
Broader Economic Context and Implications
Egypt’s trade deficit shrank by 18 percent in the first nine months of 2025, thanks to booming non-oil exports in areas like agriculture and textiles. This ties into the PMI trends, showing how private sector stability supports overall economic health.
The government has rolled out measures like tax breaks for exporters and infrastructure projects to fuel non-oil activity. These steps come amid global challenges, including rising interest rates and geopolitical tensions.
Looking ahead, firms remain cautiously optimistic about demand and economic conditions, though confidence stays below historical averages. If PMI continues to rise, it could signal a return to expansion by early 2026.
Future Outlook for Egypt’s Economy
Business expectations for the coming year improved in October, with many companies betting on stronger client demand and better domestic policies.
However, risks remain from external factors like oil price volatility and regional instability. Analysts predict GDP growth of around 4.1 percent for 2025, driven largely by non-oil sectors.
To stay informed on Egypt’s economic updates, share this article with your network and drop a comment below on what you think the next PMI report might show.
