More than 200 members of the German-Arab Chamber of Industry and Commerce (GACIC-AHK) participated in a recent survey covering Egypt’s current business climate, as well as providing a forecast for 2021.
Whereas the novel coronavirus (COVID-19) has had a significant impact on most businesses, swift and meaningful adjustments of internal and external guiding principles have allowed most companies to cope with the challenges. In conclusion, the current development of Egyptian businesses is satisfying.
Only 18% shared negative feedback. They identified the current main obstacles as travel restrictions (20%), a slowdown of demand (14%), cancellation of trade fairs (13%) and problems with supply chains (12%).
During the past few months, businesses reacted swiftly to face the challenges of the COVID-19 crisis. One third of the businesses named cost cutting as a means of overcoming the challenges, whilst 16% mentioned liquidity measures such as postponement of investments. A total of 11% said they undertook further diversification of export, with 9% of members having to downsize their businesses.
The outlook seems promising, however. A total of 52% predict their corporate results in 2021 will show an improvement compared to their current status. A negative outlook towards business results is shared by only 7% of the corporate sector.
Unfortunately, this rather optimistic view will not immediately lead to a substantial improvement of employment. Whereas 52% of business representatives wish to maintain the current employment level in 2021, only 27% may hire additional staff members.
Additional investments in machinery and digital equipment will be carried out by 39% of the members, with 38% looking into the same level of investments as in 2020. According to 49% of the participants, the Egyptian economy is expected to make a recovery during 2021.
Whereas 28% of the businesses believe the recovery will take shape in 2022, only 15% believe it will take longer. This trend is evidenced by 49% of the representatives who stated that Egypt’s general economic development during the coming 12 months will be significantly better, or better than in October 2020. Only 12% forecast that the economy will decline in 2021.