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Egypt’s Industrial Sector Invigorated by Investment Regulation Reform

The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany
The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany
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Egypt’s Industrial Sector Invigorated by Investment Regulation Reform

The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany
The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany

A number of Egyptian companies established under the new investment law are leaning towards labor-intensive markets, but capital is flowing heavily into less operational undertakings, revealed recently published government data.

The fiscal annual report for 2017-2018 said newly established companies, which amount to 6,329, belong to the industrial sector.

With 28,400 jobs created, the report concluded that the industrial sector was the most capable of generating jobs.

Coming in second, a total of 1,213 construction companies provided 2,239 jobs, followed by the agricultural sector with 1,193 companies providing 4,946 jobs, and finally the service sector with 1,027 companies giving out 2,883 jobs.

However, service companies ranked first in attracting investment capital.

The investment law issued in October 2017 provides several incentives to attract investments to advance development and invigorate the Egyptian economy.

Updated regulations encourage investments operating in areas most in need of development.

Unemployment rates in Egypt have fallen in recent months, but remain close to 10%, falling in the second quarter to 9.9% from 10.6% in the first quarter of 2018.

Unemployment in Egypt has worsened since 2011, rising from 8.9% in the fourth quarter of 2010 to 11.9 in the first quarter of 2011, but recent economic growth rates have helped in its reduction.

Egypt’s gross domestic product grew by 5.3 percent in the 2017-18 fiscal year ending in June, the highest rate in 10 years, Planning Minister Hala al-Saeed said in July, in a further sign of recovery amid tough reforms and an IMF loan.

The country has been showing signs of recovery in recent months amid tough reforms including cuts to energy subsidies implemented by the government of President Abdel Fattah al-Sisi as part of a $12 billion IMF loan agreement aimed at luring back foreign investments.

In the cumulative estimate, from 1970 to 2018, the services sector was the repeatedly the most attractive for investment in terms of the number of companies.

The report reflects the dominance of small and medium enterprises in Egypt’s economic activity.

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US Applications for Jobless Claims Fall to 201,000, Lowest Level in Nearly a Year

A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)
A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)
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US Applications for Jobless Claims Fall to 201,000, Lowest Level in Nearly a Year

A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)
A help wanted sign is displayed at a restaurant in Chicago, Ill., Nov. 25, 2024. (AP Photo/Nam Y. Huh, File)

US applications for unemployment benefits fell to their lowest level in nearly a year last week, pointing to a still healthy labor market with historically low layoffs.

The Labor Department on Wednesday said that applications for jobless benefits fell to 201,000 for the week ending January 4, down from the previous week's 211,000. This week's figure is the lowest since February of last year.

The four-week average of claims, which evens out the week-to-week ups and downs, fell by 10,250 to 213,000.

The overall numbers receiving unemployment benefits for the week of December 28 rose to 1.87 million, an increase of 33,000 from the previous week, according to The AP.

The US job market has cooled from the red-hot stretch of 2021-2023 when the economy was rebounding from COVID-19 lockdowns.

Through November, employers added an average of 180,000 jobs a month in 2024, down from 251,000 in 2023, 377,000 in 2022 and a record 604,000 in 2021. Still, even the diminished job creation is solid and a sign of resilience in the face of high interest rates.

When the Labor Department releases hiring numbers for December on Friday, they’re expected to show that employers added 160,000 jobs last month.

On Tuesday, the government reported that US job openings rose unexpectedly in November, showing companies are still looking for workers even as the labor market has loosened. Openings rose to 8.1 million in November, the most since February and up from 7.8 million in October,

The weekly jobless claims numbers are a proxy for layoffs, and those have remained below pre-pandemic levels. The unemployment rate is at a modest 4.2%, though that is up from a half century low 3.4% reached in 2023.

To fight inflation that hit four-decade highs two and a half years ago, the Federal Reserve raised its benchmark interest rates 11 times in 2022 and 2023. Inflation came down — from 9.1% in mid-2022 to 2.7% in November, allowing the Fed to start cutting rates. But progress on inflation has stalled in recent months, and year-over-year consumer price increases are stuck above the Fed’s 2% target.

In December, the Fed cut its benchmark interest rate for the third time in 2024, but the central bank’s policymakers signaled that they’re likely to be more cautious about future rate cuts. They projected just two in 2025, down from the four they had envisioned in September.