RIYADH: Kuwait’s non-oil private sector continued to expand in January, supported by strong gains in output and new orders, while Egypt’s business conditions weakened slightly despite ongoing growth in activity, new surveys showed. 

According to S&P Global, Kuwait’s Purchasing Managers’ Index eased to 53 in January from 54 in December, but remained well above the 50 threshold that signals expansion. The reading marked a 17th straight month of improvement in operating conditions. 

The sustained growth of Kuwait’s non-oil sector aligns with a broader trend across the Middle East and North Africa, where countries are pursuing economic diversification to reduce reliance on crude revenues. 

Andrew Harker, economics director at S&P Global Market Intelligence, said: “The Kuwaiti non-oil private sector started 2026 in very much a similar vein to how it ended 2025. Marked improvements in output and new orders were registered again as advertising and competitive pricing continued to drive growth.”  

According to the report, output and new orders continued to rise at marked rates in January, with growth softening only slightly from the end of 2025. New export orders also increased at a broadly similar pace to total new business, driven by demand in neighboring markets. 

“Despite efforts by some firms to take on extra staff and boost workforce capacity, the rate of job creation remained modest and outstanding business accumulated at a record pace,” said Harker. 

He added: “If companies are to keep up with workloads at a time of marked rises in new orders, they will need to continue building workforce numbers in the months ahead.” 

S&P Global added that efforts to fulfil customer orders promptly led purchasing activity to increase sharply again in January. 

The pace of input cost inflation remained elevated in January, ticking down only slightly from the previous survey period. Survey panelists linked higher costs to factors including machinery maintenance, marketing, raw materials, rent, staff, transportation and utilities. 

Looking ahead, respondents expressed optimism, driven by confidence in producing quality goods at competitive prices and supported by effective advertising strategies. 

Egypt’s PMI signals contraction

In a separate report, S&P Global said Egypt’s PMI dropped to 49.8 in January from 50.2 in the previous month, signaling a marginal weakening of operating conditions. 

On a positive note, business activity across Egypt’s non-oil private sector continued to rise at the start of the year, extending the longest streak of expansion since late 2020. 

“Although the Egypt PMI eased slightly at the start of 2026, it remained at a level indicative of growth in non-oil GDP,” said David Owen, senior economist at S&P Global Market Intelligence. 

He added: “Output increased for the third month running, albeit fractionally, as several firms highlighted that sales intakes from abroad were rising, although setbacks in demand at other companies meant that total order books slipped slightly.” 

Survey panelists who reported higher output attributed the increase to stronger overseas demand. Other companies, however, indicated that order volumes were weaker than in December, with overall sales declining slightly after two months of expansion. 

As output levels rose amid a fall in new business, several companies were able to fulfil outstanding orders in January. 

Although marginal, the rate of contraction in backlogs of work was the quickest in nearly three years. In response, several companies left positions unfilled, resulting in the largest decline in employment 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 if sales volumes remain broadly stable,” said Owen. 

He added: “Notably, this reduction in outstanding business encouraged firms to lower employment at the fastest rate in over two years, another sign that businesses expected to have spare capacity going forward.” 

Looking ahead, Egyptian non-oil companies maintained a cautious outlook for activity levels over the coming 12 months. 

Qatar’s non-oil business conditions mixed 

In a separate report, S&P Global said Qatar’s non-energy sector posted further declines in both activity and new business in January, even as the PMI rose to 50.4 from 50 in December.

While the improvement in the PMI reading signaled a slight strengthening in business conditions in the non-energy private sector, the latest figure was still among the lowest recorded in three years.

“Although the latest PMI figure of 50.4 was consistent with a slight improvement in business conditions in Qatar’s non-energy private sector at the start of 2026, upon closer inspection of the components a less favorable picture emerges,” said Trevor Balchin, economics director at S&P Global Market Intelligence.

He added: “The rise in the PMI since December’s 50 reading merely reflected slower declines in output and new orders. Underlying demand remained weak, with new business having declined in seven of the past eight months. Moreover, the drop in output was the first back-to-back contraction since the first quarter of 2025.”

According to the report, the overall improvement in business conditions in the first month of 2026 reflected higher employment and growth in stocks of purchases. These positive contributions masked further declines in output and new orders, while shorter suppliers’ delivery times also weighed on the PMI. 

Business conditions remained constrained by a fall in new orders in January, marking the seventh decrease in eight months. 

Lower incoming work led to another drop in output in the non-energy private sector, representing the first back-to-back contraction since the first quarter of 2025. 

Although output and new orders both fell further in January, the 12-month business outlook remained positive, supported by improving market conditions, investment, population growth and government projects.