Egypt's non-oil private sector economy continued to decline at the end of the first quarter, per the latest PMI survey. Business activity and new orders fell similar to February, attributed to volatile currency markets affecting demand and raising prices. However, recent policy measures eased input price inflation in March, resulting in a slower rise in output charges. The headline S&P Global Egypt Purchasing Managers' Index (PMI) rose from 47.1 to 47.6 in March, indicating a softer decline in sector health but remained below the survey's average since 2011. Activity in the non-oil private sector sharply contracted due to weak order books and high inflationary pressures. Demand remained subdued, with new order volumes declining, although higher foreign demand supported the first increase in new export orders since December 2022. Sentiment regarding future activity declined slightly, reflecting concerns about persistently depressed economic conditions. Despite recent measures addressing the currency crisis, including raising interest rates and floating the Egyptian pound, some firms still faced rising material prices and increased cost-of-living pressures. Moreover, input purchases continued to decline in March, primarily due to lower new work inflows and constrained buying activity. However, businesses increased staffing levels for the first time in 2024, offsetting a previous reduction and contributing to a fractional drop in backlogs of work.
