Egypt’s non-oil private sector entered the contraction territory in March, weakening for the first time in 2025, S&P Global said on Thursday.

The Purchasing Managers’ Index (PMI) declined to 49.2 from 50.1 in February, falling below the 50.0 threshold, which separates growth from contraction.

Weaker demand levels prompted firms to cut back on activity and purchases, leading to a reduction in headcounts.

“The non-oil sector suffered a minor setback in March, with a decline in business conditions undermining the more expansionary tone set in the first two months of the year,” said David Owen, Senior Economist at S&P Global Market Intelligence.

The PMI remained higher than its long-run trend, suggesting that businesses are still in a good overall position, he added.

The construction sector performed well in March, showing robust growth in output and new work. The expansionary tone, however, contrasted with a more subdued market environment elsewhere, particularly in the manufacturing, as well as wholesale and retail segments. 

For the first time this year, non-oil companies in Egypt registered a fall in business activity, primarily driven by a weakening in new order intakes.

While non-oil firms remained subdued in March, their output expectations fell to one of the lowest levels in the series history.

(Editing by Seban Scaria seban.scaria@lseg.com)