Egypt's non-oil private sector saw a softer contraction in May 2025, with the S&P Global Purchasing Managers' Index (PMI) rising to 49.5 from 48.5 in April, signalling the mildest deterioration in business conditions in three months. Despite staying below the 50.0 threshold, which separates growth from decline, the index came in above its long-run average of 48.2. The slowdown in the downturn was supported by weaker declines in both output and new orders. Manufacturing showed renewed growth, but services and other sectors continued to face soft demand, prompting firms to cut purchasing activity at the fastest rate since October and reduce staff for the fourth consecutive month. However, cost pressures intensified sharply. Input price inflation accelerated to a five-month high, fuelled by rising supplier charges and volatile exchange rates. Prices of key inputs like fuel, cement and paper surged, pushing firms to raise selling prices at the quickest rate since October 2024. Despite the easing contraction, business confidence remained subdued, with firms expressing concerns over persistent inflation and weak demand. Attribution: Amwal Al Ghad English Subediting: M. S. Salama
