Egypt’s non-oil private sector closed 2025 on steadier footing, expanding for a second consecutive month in December even as growth lost some speed. A closely watched business survey showed demand improving and output edging higher, offering a modest but welcome sign of stability in an economy still adjusting to sharp shifts over the past year.
The data suggest recovery, yes, but one that remains careful, uneven, and closely tied to demand rather than hiring.
PMI Holds Above Growth Line After Long Slump
According to the latest survey from S&P Global, Egypt’s Purchasing Managers’ Index eased to 50.2 in December, down from 51.1 in November, which had marked a 61-month high.
Even so, the reading stayed above the critical 50.0 line that separates expansion from contraction. That matters. Before November, the index had spent months stuck below that level, reflecting prolonged strain across the private sector.
A PMI of 50.2 may look modest on paper, but historically it aligns with annual GDP growth of roughly 5%, according to S&P Global. In Egypt’s current context, that’s not a trivial signal.
It points to an economy that is no longer shrinking at the margins, though it is far from firing on all cylinders.
Orders and Output Offer a Lift
Improved demand sat at the heart of December’s expansion.
Survey respondents reported stronger new orders, which in turn supported a slight increase in output. Businesses cited improved client spending and a more stable flow of demand compared with earlier in the year.
David Owen, an economist at S&P Global, said better order books have been a clear driver of recent performance. That observation lines up with what firms on the ground are seeing.
Basically, customers are buying again, at least a bit more consistently.
Purchasing activity also rose for the first time in 10 months, suggesting companies are cautiously restocking inputs after a long period of restraint.
Still, the pace was restrained. Firms appear to be responding to demand as it comes, rather than betting aggressively on future growth.
Hiring Lags Behind the Recovery
One area where improvement was notably absent was employment.
Despite higher output and orders, staffing levels continued to fall in December. Many companies said they struggled to replace workers who had left, citing cost pressures and uncertainty about how durable the recovery might be.
That hesitation speaks volumes.
Businesses are producing more, but they are doing so with leaner teams. It’s a familiar pattern in periods of fragile recovery, when firms test the waters before committing to new hires.
For workers, this means the benefits of expansion are not yet translating into broader job creation.
And for policymakers, it underlines the challenge of turning growth into employment.
Costs Tick Up, Prices Barely Move
Inflation pressures showed a mixed picture in the December survey.
Input costs rose slightly from November’s recent low, driven by higher prices for some raw materials and services. However, firms were largely reluctant to pass those costs on to customers.
Average selling prices increased only marginally, reflecting competitive pressures and sensitivity to consumer spending power.
That restraint suggests demand, while improving, remains price-conscious.
Companies appear wary of pushing too hard on pricing, concerned that higher charges could quickly choke off fragile gains in orders.
You know, it’s a balancing act. Raise prices too fast, and demand disappears. Absorb costs, and margins take the hit.
How December Compares With Recent Months
The PMI figures over the past quarter show a gradual, if uneven, shift in momentum:
| Month | PMI Reading | Expansion or Contraction |
|---|---|---|
| October 2025 | Below 50 | Contraction |
| November 2025 | 51.1 | Expansion |
| December 2025 | 50.2 | Expansion |
The trend points upward compared with most of 2025, but the loss of momentum from November to December highlights how sensitive conditions remain.
Growth is present, yet easily shaken.
Business Confidence Stays Neutral
Looking ahead, firms surveyed by S&P Global struck a neutral tone.
The future output index stood at 50, indicating neither optimism nor pessimism about the next 12 months. That flat outlook reflects a mix of hope and caution.
On one hand, demand has improved. On the other, challenges remain, including currency pressures, financing costs, and regional uncertainty.
Companies appear to be waiting for clearer signals before committing to expansion plans or significant investment.
That wait-and-see approach could limit how fast the recovery gains traction.
Cairo at the Center of the Picture
Much of this activity is concentrated in and around Cairo, where services, construction, and manufacturing form the backbone of the non-oil private sector.
From logistics firms near the Nile to workshops on the city’s outskirts, businesses have had to adjust to volatile conditions over the past year. Currency moves, import constraints, and fluctuating demand all played a role.
December’s PMI suggests those adjustments are beginning to pay off, albeit slowly.
The recovery does not feel dramatic. It feels tentative. But after months of contraction, even tentative growth changes the conversation.
What the Numbers Really Say
Strip away the jargon, and the December PMI tells a simple story.
Firms are seeing more orders. They are producing slightly more. They are buying inputs again. But they are not hiring, not raising prices much, and not projecting strong growth ahead.
In other words, confidence is improving, but trust in the recovery is still thin.
That makes sense given Egypt’s recent economic history. Businesses have been burned before by false starts and sudden policy shifts.
This time, they seem determined to move carefully.
A Fragile But Important Signal
December marked the second straight month of expansion for Egypt’s non-oil private sector. That alone makes it notable.
Yet the slowdown from November shows how easily momentum can fade. Growth above 50 is encouraging, but it needs reinforcement from sustained demand, stable costs, and eventually, job creation.
For now, the PMI offers reassurance rather than celebration.
It says the private sector is standing again, not sprinting. And after a long stretch below the line, that, actually, is something.
