Kuwait Non-Oil Sector Expands as Egypt, Qatar Private Economies Deepen Contraction

• Kuwait’s non-oil private sector PMI climbed to 52.9 in October, signaling a fourth straight month of expansion.
• Egypt’s non-oil PMI held at 47.2, extending a ten-month contraction streak amid intensifying cost pressures.
• Qatar’s non-energy PMI dropped to 46.3, marking its sharpest downturn since May and an eighth consecutive month below the growth threshold.

RIYADH — Growth in Kuwait’s non-oil private sector accelerated in October, even as Egypt’s economy remained mired in contraction for a tenth consecutive month and Qatar’s non-energy sector recorded its steepest decline since May, according to the latest Purchasing Managers’ Index (PMI) surveys from S&P Global.

Kuwait’s headline PMI rose to 52.9 from 52.4 in September, sustaining a four-month run above the 50-point mark that separates expansion from contraction. Egypt’s reading was unchanged at 47.2, while Qatar’s fell to 46.3 from 47.3, signaling an eighth straight month of contraction for its non-energy private sector.

The divergent readings arrive as the ongoing Middle East conflict continues to disrupt regional economic activity, trade routes, and supply chains. The World Bank’s October 2026 regional economic update projects output across the Middle East, North Africa, Afghanistan, and Pakistan to contract by 2.1 percent this year, a sharp reversal from 3.3 percent growth in 2025. Gulf Cooperation Council economies are forecast to shrink by 4.3 percent, with the closure of the Strait of Hormuz choking energy exports and weighing on broader activity.

Kuwait’s Business Activity Strengthens

Kuwait’s non-oil private sector recovery solidified in October, with output and new orders rising at a faster pace. New order growth hit its quickest rate since February, while new export orders also expanded more rapidly, buoyed by stronger demand from neighboring countries.

“The recovery in Kuwait’s non-oil private sector solidified in October, with companies increasingly able to secure new orders and boost output,” said Andrew Harker, economics director at S&P Global Market Intelligence. He noted that firms responded to higher workloads by increasing purchasing and building inventories, though part of the stockpiling reflected efforts to hedge against future price increases as inflationary pressures intensified during the survey period.

Egypt’s Private Sector Grapples with Mounting Cost Pressures

Egypt’s non-oil private sector remained in contraction territory during October, with output and new orders declining at their fastest rates in four months as businesses contended with weaker client demand, elevated prices, and eroding purchasing power.

David Owen, principal economist at S&P Global Market Intelligence, said the PMI was partly propped up by lengthening delivery times and a build-up of stocks—both symptoms of supply disruption and inflation concerns rather than genuine demand strength.

“Cost pressures intensified, with input price inflation rising to its highest since May,” Owen said. “Egyptian non-oil firms pointed to higher import, energy, and shipping costs, as well as a weaker exchange rate against the US dollar, and raised their selling prices at the quickest rate since June as a result.” He warned that the recent easing in official inflation may prove “short-lived,” complicating the policy outlook.

Qatar’s Non-Energy Downturn Deepens

Business activity in Qatar’s non-energy private sector declined at its fastest pace in seven months, while new business fell for an eleventh consecutive month at the sharpest rate since June. Companies cited weak demand, competitive pressures, project completions, and uncertainty, with construction recording the steepest activity drop.

The downturn spilled into the labor market, where employment fell for the first time since July 2024. The rate of job shedding was the strongest since December 2022, though it remained moderate overall. Firms also scaled back purchasing, and inventories declined.

Trevor Balchin, economics director at S&P Global Market Intelligence, highlighted a lone bright spot: a broad-based easing in cost pressures. “Both purchase prices and wages rose more slowly in October, taking the overall rate of input price inflation down to a six-month low,” he said. “Nevertheless, it remained relatively high, and firms raised their own charges at the fastest rate in nearly four years.”

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