The Egyptian Private Sector Concludes 2025 with the Best Quarterly Performance in 5 Years

SadaNews - The non-oil private sector in Egypt concluded last year by achieving business activity growth for the second consecutive month in December, supported by an increase in new orders, thus recording the best quarterly performance in the last quarter since five years. This improvement reflects the continued recovery of economic activity, although the momentum remained limited at the end of the year.

Although the seasonally adjusted Purchasing Managers' Index issued by "S&P Global" fell to 50.2 points in December from 51.1 points in November, it remains above the fifty mark that separates growth from contraction, indicating the continued progress of non-oil business activities in the country, albeit at a slower pace than the previous month.

Better Demand Conditions and Increased Customer Spending Support Egyptian Companies

The improvement in business conditions was driven by better demand conditions and an increase in customer spending, which encouraged companies to raise production levels, particularly in the manufacturing and construction sectors. In contrast, activities in the wholesale and retail trade and services sectors experienced a decline, reflecting a disparity in the pace of recovery among different sectors.

"The improvement in demand volumes was a clear factor behind the strong commercial performance over the past few months. The increase in sales came amid declining inflation pressures in the Egyptian economy, which enabled both companies and consumers to spend with greater confidence," according to David Owen, Senior Economist at "S&P Global Market Intelligence."

"However, the overall improvement in business conditions was weaker in December compared to the previous month, indicating that the trend of this growth should be approached with caution," Owen added.

Increase in Purchases by Egyptian Companies for the First Time in 10 Months

These positive conditions helped companies to increase their purchases for the first time in ten months; however, the stock of production inputs continued to decline for the third consecutive month due to shortages faced by some suppliers.

In contrast, the improvement in activity did not reflect positively on the labor market, as employment declined again in December at the fastest pace in 13 months. Companies attributed this to difficulties in replacing employees who left their jobs.

Limited Cost Pressures in Egypt

Companies reported that price pressures on costs remained limited, as production input prices recorded slight increases in December, primarily focused on fuel, cement, and worker wages. These increases were below the long-term average, resulting in only a marginal rise in the prices of products and services sold.

Despite the signs of improvement in business conditions, companies showed a degree of caution regarding future prospects, with their expectations for activity over the next twelve months being neutral, reflecting continued weak confidence levels during the second half of 2025.

Owen indicated that the ongoing uncertainty at both domestic and global levels continues to cast a shadow over companies, limiting their ability to adopt a more optimistic outlook as the new year begins.