Egypt's non-oil private sector output grew for the third consecutive month ‍in January, ‍marking the longest period of expansion since late ​2020, S&P Global reported on Tuesday, but demand conditions eased.

The ⁠headline seasonally adjusted S&P Global Egypt Purchasing Managers' Index (PMI) fell ⁠slightly to 49.8 ‌in January from 50.2 in December, indicating a marginal weakening in overall operating conditions. A ⁠PMI reading below 50.0 suggests contraction, while above 50.0 indicates growth.

Despite that decline, the PMI remained above its long-term average, reflecting a robust pace of ⁠non-oil GDP growth. Output increased ​for the third month, driven by stronger demand from abroad, although domestic ‍sales slipped slightly after two months of expansion.

The reduction in backlogs ​of work, the fastest in nearly three years, led to a significant decline in employment, the largest since October 2023.

"A note of caution was sounded by a decline in backlogs of work in January, which indicates that firms may have less room to expand in the coming months," said David Owen, Senior Economist at S&P Global ⁠Market Intelligence.

Companies also reduced their selling ‌prices for the first time since mid-2020, as cost pressures eased.

Looking ahead, Egyptian firms remain cautiously ‌optimistic, with expectations ⁠for activity levels over the next 12 months only marginally positive. (Reporting ⁠by Reuters; Editing by Toby Chopra)