Arab Finance: The Iran war in the Middle East weighed on the non-oil private sector, with Egyptian companies reporting a decline in business activity in March, as weaker demand and higher costs, according to the latest S&P Global Egypt PMI report.
The headline seasonally adjusted S&P Global Egypt Purchasing Managers’ Index (PMI) fell for the fourth consecutive month, declining to 48.0 in March from 48.9 in February.
The reading marked the lowest level in nearly two years and indicated a moderate contraction in operating conditions, broadly in line with the survey’s long-run average of 48.2. It also represented the most pronounced decline since April 2024.
The PMI, a composite indicator tracking new orders, output, employment, supplier delivery times, and stocks of purchases, showed softer conditions in both output and new business.
These components reached their lowest levels in almost two years, as surveyed firms cited weaker client demand, partly linked to rising price pressures associated with the regional conflict.
Cost pressures increased during the month, with higher material prices linked to the war pushing input costs to their highest level since the end of 2024.
Survey respondents highlighted higher fuel prices and increases in other inputs affected by the conflict, alongside the strengthening of the USD.
Manufacturers recorded the largest increase in costs among the monitored sectors.
In response, non-oil companies raised their selling prices at the fastest rate in ten months, with output charges increasing at the quickest pace since May 2025. The rise remained modest and broadly aligned with historical trends.
Purchasing activity increased slightly after two consecutive months of decline, while employment levels were broadly stable following job cuts at the end of last year.
Business sentiment weakened, with expectations for future activity turning negative for the first time since the survey began.
Firms indicated concerns about output over the next 12 months, although the overall level of pessimism was limited.
Only a small number of respondents linked their outlook directly to uncertainty surrounding the Middle East war.
