Egypt's non-oil private sector deteriorated at its sharpest pace in almost two years in ​March, as the ⁠Middle East war drove up costs and dampened ‌client demand, a closely watched business survey showed on Sunday.

The headline S&P Global ​Egypt Purchasing Managers' Index fell for a fourth consecutive month, dropping to ​48.0 in ​March from 48.9 in February — its lowest reading since April 2024.

The figure remained below the 50.0 threshold that ⁠separates growth from contraction, though it was broadly in line with the survey's long-run average of 48.2.

Output and new orders were the chief drags on the index, with both measures also hitting ​their lowest ‌levels for ⁠nearly two years. Firms ⁠frequently blamed the Middle East conflict for dampening client demand, partly through ​intensifying price pressures.

In a first, business expectations ‌for the coming 12 months slipped into ⁠negative territory, with companies citing uncertainty over the war as a key reason for pessimism, though the degree of gloom was described as mild.

David Owen, senior economist at S&P Global Market Intelligence, nevertheless noted that "the latest figure of 48.0 still relates to annual GDP growth of around 4.3%," adding that "recent data suggests the domestic non-oil sector is on a ‌solid underlying growth path."

Cost pressures remained a serious concern, ⁠however. Input prices surged at their joint-sharpest pace ​in one-and-a-half years, as firms cited fuel costs and other war-related commodity price increases, compounded by a stronger U.S. dollar.

In response, companies ​raised their ‌selling prices at the fastest rate in 10 ⁠months, though the increase ​remained modest overall.

(Reporting by Reuters; Editing by Hugh Lawson)