The Waiting Game

Snapshot
We can only truly live in the moment, since time waits for no man, country or business. That is certainly true in Egypt as it continues its difficult journey toward stability, brought about by the January 25 Revolution. Looking back, it’s hard to remember Egypt’s five-year stretch of growth before the global economic slowdown reared its ugly head in 2008.

And with the euro zone under the shadow of bailouts and austerity programs, it seems Egypt will have to promote its own growth and economic initiatives to get back on the right track. Unfortunately, that kind of stability and economic reform are a long way off, according to our respondents.

This month business leaders predict things will stay on course, for better or worse, including sales and company performances in the short term. A year or two later, they forecast a silver lining to Egypt’s cloud of pessimism and uncertainty. But that cautious optimism doesn’t extend to current conditions. Some 75% of the businesses surveyed say the economy is on the wrong track, with the other quarter saying things are looking up, however improbable that may seem at first glance.

These numbers jumped significantly compared to January’s barometer, where only 61% deemed Egypt’s economic policies as wrongheaded. Many, this month, blame the salvation government’s lame-duck status for our ailing economy. That could soon change with parties and parliament members discussing possible economic policies under the newly elected government.

The Insider
There is some cause to rejoice for businesses’ sales this month. According to respondents, only 30% reported slightly decreased sales, down 9% from last month’s survey. However, there are more companies being hit harder. Around 15% say they have seen heavy decreases in sales, up 1% versus January. The majority claim they are seeing similar sales over the last three months.

But there are also a few firms doing well. Around 17% are reporting slightly better sales, with another 1%, mostly large firms in the trade sector, claiming a large jump in sales recently. Most predict better results in the next three months, with 35% hoping for slight sales increases. But most, at 53% of those surveyed, are predicting similar results in the short term.

Their responses are similar to their answers when asked about company performance. Most (55%) predict they will see similar gains and losses over the next three months. Only 12% say things are going to get worse, while another 33% claim their performance will improve.

Looking two years down the road, no respondents predict worsening performance. Instead, 51% say their performance will stay the same, with the rest hoping for improved results. Their reasons include the uncertain global economy and their own company policies and strategies as well as the effects of inflation.

In the News
Egypt’s parliamentary elections are still the talk of the town, likely because the three rounds of voting for the lower house took three months to complete. The results of the nation’s first fairly elected members of parliament are also making the rounds, leaving many discussing the Muslim Brotherhood’s plans now that they’ve secured many of the almost 500 seats.

The Forecast
Looking ahead, the feelings are mixed when it comes to the economy. Many want to see the government improve the country’s finances, but there’s not much money going around these days and negotiating loans is no easy task. These factors could be behind 58% of respondents saying there will be little improvement in the next three months, while 21% predict worsening conditions.

Around 23% say things could improve soon. That number jumps to 47% two years from now. Another 51% aren’t so sure, claiming the economic situation will likely stay the same.

Around 55% of companies are taking on new clients or inking new contracts. The largest gainers here are industrial or trading firms. Around a quarter of businesses are also hawking new products, especially those in the trade sector, followed closely by the construction and services areas.

More than half of respondents say things will stay the same for Egypt’s struggling economic drivers. Some 23% disagree, predicting worsening conditions, while 26% believe the opposite. Last month 45% predicted little would change, with just 9% hoping for brighter economic days.