amcham survey results - april 2020-final-may10pptx · about the survey sample § 103 companies from...

AmCham Egypt

Impact on Business ActivitySurvey Findings from AmCham Egypt Members

April 2020

Project Brief• COVID-19’s impacts are being absorbed in every corner of the global economy. With

marked declines in manufacturing, exports and overall global commerce, businessactivity is being greatly tested.

• In its ongoing efforts to support Egypt’s business community, AmCham Egypt surveyedits members about the pandemic’s effects on their day-to-day operations and policiesas well as their expectations for the financial, personnel and strategic aspects of theirbusinesses.

• 103 businesses were surveyed in the non-oil manufacturing, oil & gas, construction &real estate, ICT, banking & finance, agriculture, transport & logistics, marketing, legalaffairs and education sectors.

1

With a membership of more than 1,900 companies, AmCham Egypt is one of the largest and most active overseas affiliates of theU.S. Chamber of Commerce. The organization strives to advance Egypt-U.S. bilateral trade and investment and advocate for abetter business environment in Egypt.

Contents

2

Sample profile

Aggregated results

Segmented results by:

Sector

Company size

Concluding insights

Executive summary1234

5

Contents

3

Sample profile

Aggregated results


Sector

Company size

Concluding insights

Executive summary1

Executive SummaryAbout the survey sample

§ 103 companies from more than 14 sectors respondedto an online survey during the first half of April abouthow the COVID-19 pandemic has affected theircurrent business and planning for the year.

§ Within the company hierarchy, C-suite executives andupper-management professionals represented theoverwhelming majority of respondents.

§ Large multinational corporations (MNCs) made up thelargest share of respondents, followed closely bymedium-sized companies. Small companiesrepresented nearly a quarter of the sample.

§ ICT was the largest sector represented in terms ofresponses, followed by non-oil manufacturing, oil &gas and banking & finance.

4

Business impacts of COVID-19§ While half of the sample reported moderate

impacts, more than 30% of companies withineach sector said their business activity wasextremely impacted by the pandemic. Only inthe oil & gas and agricultural sectors were theremore than 30% or more companies reportingminimal impacts.

§ All sectors were mostly concerned about thefinancial and operational impacts of COVID-19.Non-oil manufacturing and transport & logisticsalso listed operational and supply chainchallenges as key concerns, while hospitality &tourism and healthcare & pharmaceuticalreported severe workforce challenges.

§ Fewer large companies reported extremeimpacts on their businesses compared tomedium- and small-sized ones.

§ Likewise, fewer large firms reported financialchallenges as their top concerns compared tosmaller companies; larger businesses hadgreater concerns over supply chain challenges,while smaller firms placed greater weight onfinancial and operational challenges.

17%

50%

16%11%

44% 45%

9%

43%48%

Minimal impact Moderate impact Extreme impact

Degree of impact by firm size

Large Medium Small

36%

20%

28%

16%

45%

25%

15% 15%

50%

27%

8%15%

Financial Operational Supply chain Workforce

Business challenges by firm size

Large Medium Small

Procedures adopted due to COVID-19

§ Nearly all businesses adopted remote work policies fornon-essential employees. Production and sales-oriented businesses still have frontliners due to theirimportance.

§ More than 90% of respondents have adopted infectioncontrol procedures on the premises to contain thevirus and ensure frontlines are safe.

§ Less than 25% of the sample had an existing “DiseaseOutbreak Response Plan” prior to COVID-19.Companies with a plan in place were primarily ICT,non-oil manufacturing, banking & finance andagriculture MNCs.

Executive Summary

5

Business plans during 2020§ Almost all companies said they were potentially or definitely

reevaluating their business strategies for 2020. A few law firms, onelarge agricultural company and one pharma company were the onlyrespondents not looking to reevaluate 2020 business strategies.

§ 85% of surveyed businesses expect revenues to decline by year’send, with 50% expecting them to contract by 20% or more. However,a number of companies expected increases in their top lines due tosector-specific dynamics.

§ Fewer large firms expect their top lines to decline by more than 20%in 2020 compared to medium-sized and small ones. The majority ofmedium-sized businesses see top lines contracting by 20+%, withno respondents in this subsample expecting revenues to remainunchanged or increase by year’s end. However, more smallbusinesses believe revenues will remain stable than largebusinesses, while equal shares of the two predict top line growththrough 2020. This is likely due to sector representations in eachcategory.

§ While more than 60% of businesses reported negative impacts onemployee efficiency and ability to reach goals, nearly 80% is optingto maintain staffing levels at current levels. Hospitality & tourism,construction & real estate and oil & gas are some of the few sectorsreporting high layoff possibilities.

§ Only 9% of large companies reported personnel performance wasnegatively impacted by the pandemic, while 32% of both small andmedium-sized companies reported negatively impacted personnelperformance.

§ HR strategies are quite similar across firm sizes, with slightly higherconsiderations of layoffs among small and medium-sized firms andslightly higher increased staffing needs among larger companies.

36%

26%

14%

5%

17%

68%

24%

8%0% 0%

39%

13%17%

13%17%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase

2020 revenue predictions by firm size

Large Medium Small

10% 14%

76%

5%16%

79%

9%17%

74%

Hire more staff Consider layoffs Maintain status quo

2020 HR strategy by firm size

Large Medium Small

Views on government-backed support§ Almost all sectors had companies in favor

of bailouts or tax cuts, with a minority withineach sector seeing no benefit fromgovernment support. ICT, non-oilmanufacturing, and banking & financebusinesses were the predominant sectorsin favor of targeted support.

§ The medium-sized business subsamplehad the biggest share of respondents infavor of tax cuts, which could be a result ofsector representation in that group.

§ In contrast, large companies had thesmallest share of respondents in favor oftax cuts, bailouts and other targetedsupport. This could be due to theprevalence of MNCs in this subsample:international companies may not qualify forlocal bailout programs or the parentcompanies may be directing their localarms not to accept local support.

76% 84% 78%

24% 16% 22%

Large Medium Small

Views on government support by firm size

Yes No

Contents

6

Sample profile

Aggregated results


Sector

Company size

Concluding insights

Executive summary

2

A Brief Rundown of our SampleSegmentation by sector Company size

7

Respondents’ profile

23

38

42

22%

37%

41%

15%

20%

25%

30%

35%

40%

45%

0

5

10

15

20

25

30

35

40

45

Small (< 50 employees) Medium (51-250employees)

Large ( > 250employees)

Number of companies

Share of total responses

57%

40%

3%

Senior executive

Upper-management

Middle-management

ICT was the largest sector represented in terms of responses, followed by non-oil manufacturing, oil & gas and banking & finance. Together, these sectors accounted for 45% of the sample.

The majority of respondents were large multinationalcorporations (MNCs) with more than 250 employees. In thenon-oil manufacturing sector, 100% of MNCs had one or moreproduction facilities located across the country. The other largebusinesses were predominantly in the banking & finance, ICT,oil & gas and transport & logistics sectors. The medium-sizedbusinesses polled mostly operated in construction & realestate, marketing and education/training/consulting markets.

Company chairmen, CEOs and other C-suiteexecutives as well as upper-managementexecutives represented the overwhelmingmajority of respondents.

15%

11%

10%

10%9%

9%

6%

5%

5%

5%

5%4%

4%2%

ICT

Non-oil Manufacturing

Oil & Gas

Banking & Finance

Construction & Real Estate

Education/Training/Consulting

Agriculture

Transport & Logistics

Healthcare & Pharmaceuticals

Hospitality & Tourism

Marketing

Insurance

Legal Affairs

NGOs, NPOs & Other Associations

Contents

8

Sample profile

Aggregated results


Sector

Company size

Overall insights

Executive summary

3

Aggregated Results1. Business impacts of COVID-19

9

§ Almost all respondents foresee extreme tomoderate impacts on business activitythroughout 2020 due to the pandemic’soutbreak.

§ High reporting of minimal impacts came fromlarge exporting agricultural firms andupstream oil & gas companies.

§ Businesses are mostly concerned about thefinancial and operational impacts of COVID-19.

§ While supply chain and workforce challengeswere equally regarded, companies withextensive supply chains are severelyimpacted with workforce shortages,particularly blue-collar workers. Sales-oriented businesses such as ICT,construction & real estate and oil & gas arealso facing challenges as personnel struggleto attain targets.

§ 85% of businesses see revenues decliningby year’s end, with 50% expecting them tocontract by 20% or more. However, anumber of companies reported expectedincreases in their top lines due to sector-specific dynamics.

40%

50%

10%

Extreme impact

Moderate impact

Minimal impact

Impact on business activity

Financial35%

Operational25%

Workforce20%

Supply chain20%

Business risks by type

50%

22%13%

5% 10%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase

Impact on 2020 revenues

Banking & finance

Agriculture

Hospitality & tourism

Construction & real estate

Non-oil manufacturing

ICTInsurance

Legal affairs

Education

Oil & gas

Healthcare & pharma

Marketing

Transport & logistics

NPOs, NGOs & other associations

§ Nearly all businesses adopted remote workpolicies for non-essential employees. Productionand sales-oriented businesses still havefrontliners due to their importance.

§ More than 90% of respondents have adoptedinfection control procedures on the premises tocontain the virus and ensure frontlines are safe.

§ More than half the sample expect notable impacton their supply chains should the curfew periodextend over the longer term.

§ Respondents anticipating disruptions in theirsupply chains as a result of an extended curfewperiod operate in ICT (16%), non-oilmanufacturing (13%), banking & finance (9%),construction & real estate (8%) and transport &logistics (7%).

§ By contrast, companies expecting the extendedcurfew to have little to minimal impact on theirsupply chains were from the oil & gas (19%),legal affairs (13%) and marketing (13%) sectors.

§ Less than 25% of the sample had an available“Disease Outbreak Response Plan” prior toCOVID-19. Companies with a plan in place wereprimarily multinational corporations from thefollowing sectors:

- ICT- Oil & gas- Non-oil manufacturing- Banking & finance- Agriculture

Aggregated Results2. Procedures adopted during the outbreak

10

Yes91%

No9%

Safeguarding procedures adopted post-outbreak

Yes23%

No77%

Available "Disease Outbreak Response Plan" prior to COVID-19

33%

17%

13%

8%

8%

4%4%4%4%

ICT

Oil & Gas

Banking & Finance

Agriculture

HR/Training/Consulting


Education


Transportat & Logistics

Procedures adopted for frontlines

1. Sterilization/disinfection measures at production facilities and/or front end facilities

2. Use of PPE

3. Suspension of B2C meetings

4. Temperature screening, quarantine measures and daily employee testing

5. Business travel bans

6. Reducing shift hours

7. Isolation/social distancing at field operation facilities

8. Rotational work plans to reduce density at facilities

31%

16%

53%

Maybe

No

Yes

Will the extended curfew period impact company supply chains?

Yes79%

Maybe17%

No4%

Is your business re-evaluating some/all of 2020 business

strategies?

Aggregated Results3. Company plans

3%

19%

41%

21%

16%

Impact on personnel performance

Extreme impact

Negative impact

Somewhat negative impact

Minimal impact

No impact

§ More than 60% of businesses reportednegative impacts on employee efficiencyand ability to reach goals. Least impactedpersonnel operated in MNCs in the non-oilmanufacturing, education and the ICTsectors.

§ Only 9% of large companies reportedpersonnel performance was negativelyimpacted by the pandemic, while 32% ofboth small and medium-sized companiesreported negative personnel performance.

§ Just under 80% of the sample is opting tomaintain staffing levels at companies.Sectors largely considering layoffs includehospitality & tourism, construction & realestate and oil & gas. Small ICT consultingcompanies are also considering layoffs.

§ Larger ICT companies are the main sectorconsidering hiring more staff. However,various banks, agricultural exporters andfood manufacturers also reported increasedstaffing needs.

§ A few law firms, a large agriculturalcompany and one pharma company werethe only respondents not looking toreevaluate 2020 business strategies.

§ While almost all sectors had companies infavor of bailouts or tax cuts, the majority ofthese were in ICT, non-oil manufacturing,banking & finance, and oil & gas.

8%

15%

77%

Hire morestaff

Considerlayoffs

Maintainstatus quo

2020 HR strategy

Would tax cuts/sector-specific bailout packages help your business?

Yes80%No

20%

20%

17%

17%

13%

9%

4%

4%

4%

4%

4%

4%

ICT

Oil & Gas



Banking & Finance


Agriculture

Health & Pharma

Marketing

Insurance

NGOs, NPOs & Other Associations

16%10%10%10%7%6%6%6%6%5%5%5%4%4%

ICTNon-oil Manufacturing

Construction & Real EstateOil & Gas

Banking & Finance

Transport & LogisticsEducation/Training/Consulting

Hospitality & TourismAgriculture

Health & PharmaMarketing

Legal Affairs

Insurance

NGOs, NPOs & Other Associations 11

Contents

12

Sample profile

Aggregated results


Sector

Company size

Overall insights

Executive summary

4

1. ICT (15% of sample)

13

The majority of large companies operate in ITinfrastructure and communications, both of which havebeen minimally-moderately impacted. The impact maychiefly be due to heavier traffic across digitalinfrastructure as businesses and consumers looking foralternative communication tools while on lockdown.

1. The majority are witnessing moderate impacts onbusiness activity. Nearly 40% cite financialchallenges, while 48% of respondents collectivelyreported operational and/or supply chainchallenges.

2. 87% of ICT companies expect revenue decreasesby year’s end. Companies expecting an increase inrevenues were primarily engaged in IT consulting,which may benefit from increasing businessdemand for digital transformation strategies andbusiness continuity advisory services.

3. ICT is one of the few sectors reporting minimalimpacts on personnel performance. 53% of thesample believe employees have faced minimalchallenges to achieve goals.

4. Still, 27% are considering layoffs, the majority ofwhich are medium-sized companies expectingrevenues to contract by more than 20% in 2020.

5. The ICT sector also had the highest number ofcompanies in favor of government support.

6. Due to the software-driven nature of ICT, thissector reported the most companies with DiseaseOutbreak Response Plans prior to the COVID-19pandemic.

Small13%

Medium33%

Large54%

26%

67%

7%

Extremeimpact

Moderateimpact

Minimalimpact

1. Impact on business activity

33%27% 27%

0%13%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase

2. 2020 revenue expectations

Negative impact20%

Somewhat negative impact27%

Minimal impact33%

No impact20%

3. Impact on personnel performance

13%27%

60%

Hire more staff Considerlayoffs

Maintain statusquo

4. 2020 HR strategy

Yes47%

No53%

6. Available "Disease Outbreak Response Plan" prior to COVID-19

Yes87%

No13%

5. Would tax cuts/sector-specific bailout packages help your business?

37%

26%

22%

15%

Financial

Operational

Supply chain

Workforce

Extreme impact0%

Company size

Due to slower trade activity, restricted movementsand virus containment measures, non-oilmanufacturing has been primarily hit by supplychain disruptions (production and distribution),and workforce shortages. 33% of manufacturingcompanies reported supply chain challenges.1. No companies reported minimal impacts on

business activity, while the majority seemoderate impacts. Companies reportingextreme impacts were in theglass/plastic/metal and textile businesses.These represented 45% of the subsampleand all reported revenues would decrease bymore than 20%.

2. Companies expecting increases in top lineswere food manufacturers. Other businesslines represented in the subsample includeFMCGs and industrial manufacturingcompanies, both of which see top linesretracting between 1-20%.

3. Because the sector is a blue-collar industry,companies reported overall negative impactson personnel efficiency and ability to meetgoals.

4. The overwhelming majority will maintainstaffing levels. Companies looking to hire arefood manufacturers; those considering layoffsare industrial and intermediate goodsmanufacturers.

5. All the subsample sees an extended curfewchallenging to their supply chains.

6. Sin stock businesses were the onlycompanies to report that tax cuts/bailoutswould not help cushion business activity.

45%

9%

28%

0%18%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Medium18%

Small18%

Large64%

36%

64%

0%

Extremeimpact

Moderateimpact

Minimalimpact


23%

27%

33%

17%

Financial

Supply chain

Workforce

Operational

9% 9%

82%


Maintain statusquo

4. 2020 HR strategy

Yes9%

No91%


Maybe27%

No0%Yes

73%

5. Will an extended curfew period impact company supply chains?

Yes73%

No27%


Company size


Minimal impact18%


Extreme impact9%

Negative impact9%

No impact9%

14

2. Non-oil Manufacturing (11% of sample)

Global declines in oil prices coupled withdepressed local consumption of octane anddiesel fuel are significantly impacting oil & gasoperations in Egypt.1. 70% of oil & gas companies reported

moderate to extreme impacts on businessactivity, predominantly financial.

2. 70% of the subsample is predicting revenuelosses of more than 20% by year’s end.These are small and medium-sizedcompanies.

3. While 40% see minimal to no impacts onpersonnel performance, 60% ofrespondents report negative impacts onemployees’ efficiency and ability to meetgoals. This is likely due to the industry’sreliance on field operations and sales - bothdisrupted by the pandemic’s outbreak.

4. The oil & gas sector is another sectorreporting high considerations of laying offstaff. Those considering layoffs are mainlyupstream companies.

5. 40% oil & gas companies did not feel notsector-specific packages would supporttheir business. This could be due to lowernatural gas prices for industrial usage thatthe government mandated to induceindustrial activity during the pandemic. Withthe global slowdown in oil demand,companies’ margins may be on the line.

6. The sector was also one of the few sectorswith existing ”Disease Outbreak Response”plans, possibly due to heavy multinationalpresence.

70%

10% 0% 20% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Small20%

Medium50%

Large30%

40%

30%

30%

Extremeimpact

Moderateimpact

Minimalimpact


44%

14%

21%

21%

Financial

Operational

Supply chain

Workforce

0%

40%

60%


Maintain statusquo

4. 2020 HR strategy

Yes40%No

60%


Yes60%

No40%


Negative impact20%


No impact30%


Extreme impact0%

Minimal impact10%

Company size

15

3. Oil & Gas (10% of sample)

20% 20%

30%

10%

20%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Small40%

Medium30%

Large30%

30%

60%

10%

Extremeimpact

Moderateimpact

Minimalimpact


43%

36%

7%

14%

Financial

Operational

Supply chain

Workforce


Minimal impact30%


Extreme impact0%

Negative impact10%

No impact0%

20% 0%

80%


Maintain statusquo

4. 2020 HR strategy

Yes20%

No80%


Yes80%

No20%


Company size

16

On the one hand, monetary easing has positivelyaffected retail and commercial demand-side dynamicsfor the banking sector. However, lower interest ratesand relaxed capital controls may take a toll on thesector’s profits and asset quality indicators. Other non-banking service providers such as mortgage finance,microfinance and factoring and leasing companies alsoface similar challenges.1. The majority reported a moderate impact on

business activity, predominantly financial. Assetmanagement, investment banking and brokeragefirms reported extreme impacts. Financial serviceproviders reporting minimal impacts were Egypt’stop banks in terms of assets.

2. 70% of the subsample sees top lines declining byyear’s end. Non-banking financial services firmswere the ones mainly expecting 10-20+% revenuedecreases. Large banks see no impacts/increases inrevenues throughout 2020.

3. Due to the sector’s customer-centric nature,companies report operational impacts as the secondbiggest challenge for business activity. Accordingly,70% of the subsample sees a negative impact onpersonnel performance.

4. Banking & finance was one of the few sectors toreport possible increased staffing needs in 2020.This may likely be correlated with anticipatedincreased demand for loans, facilities and otherfinancial services.

5. Tax cuts/bailouts may be particularly helpful fornewly deployed financial services such asmicrofinance, factoring and leasing (as well asmortgage finance, though not new to the market), asthe CBE has yet to include these lines of business inits monetary stimulus package.

4. Banking & Finance (10% of sample)

56%44%

0% 0% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase

2. 2020 revenues expectations

The construction & real estate sector has beenseverely impacted by construction delays,workforce shortages and depressed demand.

1. Nearly 60% of companies reported extremeimpacts on business activity, with financialimpacts being the predominant concern.

2. The majority also see 2020 revenuesretracting by more than 20%; largecompanies expect 10-20% declines.

3. Due to its heavy reliance on frontliners(sales force and blue-collar workers atconstruction sites), 56% of the subsamplereported negative impacts on personnelperformance due to COVID-19.

4. The majority is still planning on maintainingstaff levels. Companies considering layoffsare all medium-sized and may bechallenged by higher cash flow shortages.Companies considering hiring more staff arefront-end sales/home brokerage firms withdigital sales platforms.

5. The only companies seeing no benefits fromtax cuts/bailouts were the foreign players,who may not qualify for these incentives.

No companies in this subsample had ”DiseaseOutbreak Response” plans.

Medium44%

Large56%

56%

44%

0%

Extremeimpact

Moderateimpact

Minimalimpact


53%

13%

8%

26%

Financial

Operational

Supply chain

Workforce

Negative impact23%


Minimal impact33%

No impact11%


Extreme impact0%

11% 11%

78%


4. 2020 HR strategy

Yes89%

No11%

5. Would tax cuts/sector-specific bailout packages help your

business?

Company size

17

5. Construction & Real Estate (9% of sample)

67%

0%22%

0% 11%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Small33%

Medium44%

Large23%

44%

44%

12%

Extremeimpact

Moderateimpact

Minimalimpact


54%

24%

15%

7%

Financial

Operational

Supply chain

Workforce

0% 11%

89%


Maintainstatus quo

4. 2020 HR strategy

Yes33%

No67%


Yes56%

No44%



Minimal impact22%

Almost no impact45%


Extreme impact0%

Negative impact11%

Company size Education has been hit by suspension of activities,leading a disruption in teaching, assessments andmass shifts to digital platforms to maintain classes.Consulting and training services have also beenlooking to digitalize to maintain revenue streams,but are facing lower demand from companies whoare already coping with disruptions to theirbusiness.1. Companies in this subsample are reporting

extreme-moderate impacts in financialsfollowed by operational activity.

2. The majority also see 2020 revenues retractingby more than 20%, especially small to mediumfirms. Larger organizations expect minordecreases in top lines and/or minor increases.

3. With respondents reporting very few workforcechallenges, most of the subsample seeminimal impacts on employee performanceduring this period.

4. The majority are opting to maintain currentemployment levels at their firms. Companiesconsidering layoffs are mainly in the trainingbusiness.

5. The subsample is almost equally divided ontax cuts/bailouts for the industry, but those infavor were smaller companies.

100% of education/training/consulting businessesadopted safeguarding procedures post-outbreakand implemented remote working policies for theirnon-essential staff.

18

6. Education/Training/Consulting (9% of sample)

0%

67%

0% 0%

33%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Small17%

Medium33%

Large50%

17%

33%

50%

Extremeimpact

Moderateimpact

Minimalimpact


35%

25%

20%

20%

Financial

Operational

Supply chain

Workforce

17% 0%

83%

Hire morestaff

Considerlayoffs

Maintainstatus quo

4. 2020 HR strategy

Yes67%

Maybe17%

No16%

5. Is your business re-evaluating some/all of 2020 business strategies?

Yes83%

No17%


Yes33%

No67%


Company size

19

Negative impact66%


No impact17%

Extreme/Negative impact0%

Minimal impact17%

7. Agriculture (6% of sample)With export season running from July toSeptember, this sector has been partiallyshielded from mass disruption.1. This sector had one of the highest number

of respondents reporting minimal impactson business activity. 50% are stillwitnessing moderate-extreme impacts, butonly 17% of companies are reportingextreme impacts to their business.

2. Agribusinesses, all operating in grains andseeds, mostly predict 10-20% declines inrevenues by year’s end. On the other hand,larger businesses (in fruits and vegetables)are expecting increases in revenues. Thismay be related to the current exportseason, which may enable them to tap intomarkets on export lockdowns.

3. Due to its labor-intensive nature, almost70% of agribusinesses reported negativeimpacts on workforce efficiency and abilityto meet goals.

4. Agrifood companies are looking into hiringmore staff, while the remaining majority ofcompanies in grains, poultry and othersubsectors are planning to maintain staffingstatus quo.

5. Agribusiness was one of the fewsubsamples with companies reporting theywould not be reevaluating their 2020business strategies.

6. Most companies would benefit from sector-specific support, but the minority seeing nobenefit from the support are traders ofessential food items currently subject toexport bans.

Global supply chain disruptions, significantlyslower trade activity and virus containmentmeasures have severely impacted transport andlogistics worldwide, and Egypt is no exception.1. All companies polled reported moderate-

extreme impacts on business activity.Because the sector’s operation is stronglytied to supply chains, companies reportedoperational and supply chain challengesamong the main risks on business activity. Agood portion also reported marked financialimpacts.

2. The larger part of the subsample seesrevenues dwindling in 2020, especially oncelong-term backlogs are cleared out andagricultural export season comes to an endby Q3. Couriers reported expectedincreases in revenues, possibly as viruscontainment measures and households onlockdown have triggered higher e-commerceactivity and more door-to-door delivery.

3. 84% of transport & logistics companiesreport negative impacts on employeeefficiency and ability to meet goals given thecurrent lockdown period.

4. Still, no companies in this subsample areconsidering layoffs.

Small17%

Medium50%

Large33%

50%

50%

0%

Extremeimpact

Moderateimpact

Minimalimpact


30%

38%

22%

10%

Financial

Operational

Supply chain

Workforce

67%

0% 0% 0%

33%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Extreme impact17%

Negative impact17%


No impact16%


Minimal impact0%

0% 0%

100%


4. 2020 HR strategy

Yes17%

No83%


Company size

20

8. Transport & Logistics (5% of sample)

The healthcare & pharma sectors are taking thecenter stage in the COVID-19 fight. They arewitnessing demand influxes from patients andnon-patients for PPE and medical supplies aswell as essential medicines. Private healthcareproviders are not involved in treating patientsbut have been asked by government authoritiesto be on stand by if matters escalate.Accordingly, both sectors have reportedmoderate and extreme impacts on businessactivity.

1. Business impacts are almost evenlydistributed between financial, operational,supply chain and workforce issues, withhigher weight given to financial.

2. 80% of the subsample see top linedecreases exceeding 10% as non-emergency/elective treatments slow downat hospitals, traffic interruptions disruptpharma distribution and retail, and viruscontainment measures limit patient entries.However, these are all short-term. Largerorganizations see no impact on 2020revenues.

3. Most companies see a moderate negativeimpact on personnel performance post-outbreak.

4. Still, all are planning on maintaining staffinglevels.

5. A multinational pharma company is the onlyone not reconsidering 2020 businessstrategies.

6. Pharmaceutical companies and diagnosticlabs see benefits from government support,while hospitals and other medical providersdid not.

Small17%

Medium50%

Large33%

40%

60%

0%

Extremeimpact

Moderateimpact

Minimalimpact


40% 40%

0%20%

0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Negative impact40%


No impact20%


Minimal impact0%

Extreme impact0%

0% 0%

100%

Hire morestaff

Considerlayoffs

Maintainstatus quo

4. 2020 HR strategy

Yes80%

No20%


Yes40%

Maybe40%

No20%

5. Is your business re-evaluating some/all of 2020 business strategies?

Yes20%

No80%


Company size

21

36%

21%

21%

22%

Financial

Operational

Supply chain

Workforce

9. Healthcare & Pharmaceuticals (5% of sample)

Hospitality & tourism has been the mostseverely impacted economic sector.Travel bans have suspended inboundtourism, which draw in significant foreigncurrency inflows each year. Because bothsectors are also big employers of Egypt’slabor force, they face high workforcechallenges.

1. Companies in both sectors areprimarily faced with severe financialand workforce challenges due todrops in revenues and lack ofbusiness.

2. Revenues are predicted to contract bymore than 20%.

3. 80% of companies see negativeimpacts on their workforce.

4. However, 60% of the subsample willmaintain staff levels. These are largerorganizations, while medium-sizedcompanies will face more strugglesmaintaining cash flows, which leadsthem to consider layoffs.

Medium40%

Large60%

100%

0%

0%

Extremeimpact

Moderateimpact

Minimalimpact


35%

23%

15%

27%

Financial

Operational

Supply chain

Workforce

100%

0% 0% 0% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Negative impact20%


Minimal impact20%


Extreme impact0%

No impact0%

0%

40%

60%


4. 2020 HR strategy

Yes20%

No80%


Company size

22

10. Hospitality & Tourism (5% of sample)

Businesses in marketing, sales andadvertising are hit hard by budget freezes,households on lockdown (affecting outdooradvertising) and changes in consumerbehaviors (leading to significant marketingand advertising budget reallocations).

1. 100% of companies in these sectors areseeing moderate to extreme impacts.More extreme impacts are beingwitnessed by smaller sized mediaagencies and telemarketers. There areno supply chain challenges facingcompanies in marketing; financialchallenges were most cited byrespondents, followed by operationalchallenges.

2. Most of this subsample sees top linescontracting by more than 20% by year’send. The 20% predicting lower declinesare telemarketing agencies.

3. With minimal workforce challengesreported, the majority of the subsamplesees minimal impacts on personnelefficiency. Meeting targets maydefinitely be one of the challengesfacing employees, which is why 40% ofthis subsample still see negativeimpacts on their personnel.

4. A minority is considering layoffs, mostlysmall-sized media/branding agencies.

5. Like most sectors, the majority seesbenefits from tax cuts/bailout packages.

80%

20% 0% 0% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


Small20%

Medium80%

40%

60%

0%

Extremeimpact

Moderateimpact

Minimalimpact


Negative impact20%

Minimal impact60%


Extreme impact0%

No impact0%


0% 20%

80%

Hire more staff Consider layoffs Maintain statusquo

4. 2020 HR strategy

Yes20%

No80%


Yes80%

No20%


Company size

56%

30%

14%

Financial

Operational

Workforce

23

11. Marketing (5% of sample)

Others (8% of sample size)Insurance

24

0%

75%

25%

Extremeimpact

Moderateimpact

Minimalimpact


80%

20%

Financial

Operational

25%

50%

25%0% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase

2020 revenue expectations

25% 0%

75%

Hire morestaff

Considerlayoffs

Maintainstatus quo

2020 HR strategy

Due to the small number of respondents, results for legal affairsand insurance companies were combined. The two sectorscollectively accounted for 8% of the sample.Insurance:§ All insurance companies were large-sized, with 250+

employees.§ Most surveyed companies see moderate impacts on business

activity. The 25% seeing minimal impacts were in the lifesegment, which will likely see more sustained demand thanthe non-life segment, because that latter does not includeCOVID-19 in its coverage plans (as per global standards)

§ All insurers see revenue declines by year’s end. Moreoptimistic companies were those with life insurance arms orfully in life insurance. Companies operating only in non-life areexpecting 20+% decreases in top lines.

§ The majority sees minimal negative impacts on personnel andare maintaining staffing levels as is for 2020. Life insurers areconsidering hiring more staff.

§ Life insurers were the only ones who saw no added benefitsfrom targeted sector support from the government.

Legal Affairs§ Law firms were evenly divided between small and medium

sized.§ The majority see moderate impacts on business activity,

mainly financial challenges. The 25% seeing extreme impactson business activity are firms with portfolios concentrated inM&As, IPOs and debt/equity capital markets.

§ Firms mostly focused on corporate law are on the morepessimistic side of top line predictions, while commercial andarbitration firms see 10-20% declines in their top lines in 2020.

§ 75% of the sample sees somewhat negative impacts onemployee efficiency and ability to meet goals, but all aremaintaining staffing levels throughout 2020.

§ Two out of four respondents are not evaluating their 2020business strategies.

§ All legal affairs firms see benefits from tax cuts/bailouts shouldthe government direct any targeted support to their sector.

Legal Affairs



No impact0%

Extreme/negative impact0%

Minimal impact25%

25%

75%

0%

Extremeimpact

Moderateimpact

Minimal impact


75%

25%

Financial

Operational

50% 50%

0% 0% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase

2020 revenue expectations


No impact25%


Extreme/negative impact0%

Minimal impact0%

0% 0%

100%

Hire morestaff

Considerlayoffs

Maintainstatus quo

2020 HR strategy

Contents

25

Sample profile

Aggregated results


Sector

Company size

Overall insights

Executive summary

4

Large Companies (> 250 employees)

26

Large companies account for 41% of thesample. All of them had adopted a work fromhome policy for non-essential back-officeemployees.

1. Companies expecting minimal impacts onbusiness activity predominantly operatedin the ICT, oil & gas and agriculturalsectors. Moderate impacts were reportedin non-oil manufacturing, healthcare &pharmaceuticals and banking & finance;while extreme impacts were mostcommon among large companies inhospitality & tourism and transport &logistics. Large businesses are mostlyconcerned about the financial andoperational impacts of COVID-19.

2. 85% of this subsample sees revenuesdeclining by year’s end, 50% of whichexpect them to contract by 20% or more.Large businesses expecting no impact ontop-line growth operate in agriculture,banking & finance and healthcare &pharmaceuticals.

3. Available "Disease Outbreak Response"plans are most common among ICTcompanies.

18%

17%

12%10%

7%

7%

7%

7%

5%5% 5%

Sector segmentation

ICT



Insurance

Banking & Finance


Agriculture

Oil & Gas



Education

33%

50%

17%

Extremeimpact

Moderateimpact

Minimalimpact


36%

28%

20%

16%

Financial

Operational

Supply chain

Workforce

Yes31%

No69%

3. Available "Disease Outbreak Response Plan”prior to COVID-19

ICT (31%)Agriculture (15%)Banking & Finance (7%)Oil & Gas (7%)Non-oil Manufacturing (7%)Education (7%)Insurance (7%)Hospitality & Tourism (7%)

36%26%

14%5%

17%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase


1. 55% of large businesses arewitnessing minimal impacts onemployee performance, largelydue to business processes inplace. The 9% witnessing extremeto negative impacts were operatingin hospitality & tourism,construction & real estate andother labor-intensive businesses.

2. The majority is opting formaintaining the status quo of theiremployment levels during 2020.Some oil & gas and hospitality &tourism companies reportedpossible layoffs, while someagriculture, ICT and construction &real estate businesses areconsidering extra hires.

3. The majority of large businessesthat see no benefit fromgovernment support to their sectorwere in oil & gas,education/HR/consulting andagriculture. It is important to notethat some companies within thesesectors did see benefit from sector-targeted reliefs.

2%

7%

36%

31%

24%


Extreme impact

Negative impact

Somewhat negative impact

Minimal impact

No impact

Yes80% No

20%

27

10%

14%

76%

Hire morestaff

Considerlayoffs

Maintainstatus quo

2. 2020 HR strategy

22%

16%

13%

9%

9%

9%

6%

6%

6%

4%

ICT



Banking & finance


Insurance

Agriculture

Healthcare & pharma


Oil & gas

30%

20%

20%

10%

10%

10%


Oil & gas

Education/training/consulting

Agriculture

ICT

Insurance


Large Companies (> 250 employees)

45%

44%

11%

Extremeimpact

Moderateimpact

Minimalimpact


45%

25%

15%

15%

Financial

Operational

Supply chain

Workforce

Yes26%

No74%


Oil & Gas (30%)ICT (20%)HR/Training/Consulting (20%)Banking & Finance (10%)Marketing (10%)Transport & Logistics (10%)

Medium-sized companies account for 37% ofthe sample. All of them had adopted a workfrom home policy for non-essential back-office employees.

1. Expectedly, fewer companies areexperiencing minimal impacts (comparedto large companies) and more arereporting moderate-extreme impacts. Agreater share of medium-sizedcompanies were impacted by financialissues, compared to large companies.Workforce challenges are taking almostthe same share of business impactsamong medium-sized companies.Medium-sized companies areconsiderably less impacted by operationaland supply chain challenges compared tolarge businesses.

2. No medium-sized companies areexpecting increased or unchanged 2020top lines. Companies predicting revenuedecreases exceeding 20% for 2020 are42% higher than large businesses. Theseoperate in transport & logistics,education, hospitality & tourism, oil & gasand marketing.

3. ”Disease Outbreak Response” plans weremost common among medium-sized oil &gas and ICT companies.

28

13%

11%

11%

11%11%

8%

7%

5%

5%

5%

5%5% 3%

Sector segmentation

ICT



Marketing

Oil & Gas

Banking & Finance


Agriculture



Legal Affairs


NGOs, NPOs and other associations

68%

24%8% 0% 0%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase



Medium Companies (50-250 employees)

Negative impact32%


Minimal impact13%

No impact13%


0%Extreme impact

1. 74% of medium-sized companiesreported negative impacts onemployee performance and ability tomeet goals (compared to 45% oflarge businesses). By contrast, only26% of this subsample see minimalHR impacts (compared to 54% oflarge businesses).

2. Medium-sized businesses are alsogenerally keeping staff levels as is.16% are considering layoffs(compared to 14% of large ones)and 5% are looking for moreonboarding (compared to 10%among large companies). While onlylarge hospitality & tourism and oil &gas companies were consideringlayoffs, some medium-sized ICT andmarketing businesses also joinedthis subset.

3. The majority of medium businessesthat see no benefit from governmentsupport to their sector were in oil &gas, education/HR/consulting,marketing and healthcare & pharma.Medium-sized agriculture companiessee benefits from governmentsupport to their sector, where largeagricultural companies reported nobenefit from targeted relief.

29

5%

16%

79%

Hire morestaff

Considerlayoffs

Maintainstatus quo

2. 2020 HR strategyNGOs, NPOs and other associations

40%

20%

20%

20%

20%

Oil & gas



Marketing

Healthcare & pharma

Yes84%

No16%


16%10%9%9%9%9%8%6%6%6%6%3%3%

Legal affairs

Agriculture

ICT

Banking & financeConstruction & real estate

Transport & logisticsEducation/training/consulting

Marketing



Healthcare & pharmaNGOs, NPOs & other

Oil & gas

Medium Companies (50-250 employees)

43%

48%

9%

Extremeimpact

Moderateimpact

Minimalimpact


50%

27%

8%

15%

Financial

Operational

Supply chain

Workforce

Yes4%

No96%


ICT

Small companies account for 22% of the sample.All of them had adopted a work from home policyfor non-essential back-office employees.

1. 91% of small businesses surveyed seemoderate to extreme impacts on businessactivity, compared to 89% and 83% of medium-and large-sized respondents, respectively. Bycontrast only 9% of small businesses areminimally impacted, compared to 11% ofmedium and 17% of large ones. Smallbusinesses reporting minimal impacts onbusiness activity operated in the agriculturalsector, a subsample that is mostly concernedabout the financial and workforce impacts ofCOVID-19. 50% of small businesses seefinancial impacts as the most impactful on theirbusinesses (compared to 45% of medium-sizedbusinesses and 36% of large-sized ones).Operational challenges are the second biggestimpact for small businesses: 27% of the samplecited operational challenges (compared to 25%of medium-sized companies and 20% of largeones).

2. More smaller companies expect revenues tostay unchanged or increase in 2020 than thetwo other subsamples. These were non-banking finance service providers.

3. ICT companies were the only ones with existing“Disease Outbreak Response” plans amongthis subsample.

30

40%

13% 17% 13% 17%

Decrease(+20%)

Decrease(10-20%)

Decrease(1-10%)

No ImpactExpected

Increase



18%

13%

13%

9%9%

9%

9%

4%

4%4%

4% 4%

Sector segmentation

Banking & Finance


Oil & Gas

HR/Training/Consulting

ICT

Legal Affairs


Education


Marketing


Agriculture

Small Companies (< 50 employees)

Negative impact22%


Minimal impact17%


Extreme impact9%

No impact4%

Yes78%

No22%

1. 79% of surveyed small companiesreported negative impacts on employeeperformance and ability to meet goals(compared to 74% of medium- and 45%of large-sized ones). Only 21% of smallplayers see minimal-to-no HR impacts(compared to 26% of medium and 54% oflarge businesses).

2. Small businesses are also generallykeeping staff levels as is. 17% areconsidering layoffs (compared to 16%and 14% of the medium and largesubsamples, respectively). 9% of smallcompanies are considering hiring morestaff. While this share is lower than the10% for large companies, it is higher thanthe share for medium-sized ones, whereonly 5% are looking to possibly hire in2020.

3. While oil & gas companies did not seebenefits from targeted governmentsupport in the large and mediumsubsamples, they led the small-businesssubsample in responding “yes” totargeted tax cuts/bailouts to their sector.

31

9%

17%

74%

Hire morestaff

Considerlayoffs

Maintainstatus quo

2. 2020 HR strategy


3. Would tax cuts/sector-specific bailout packages help your business?17%

11%

11%

11%

11%

10%

6%

6%

6%

6%

5%

Oil & gas


Banking & finance


Legal affairs

NGOs, NPOs & other associations


Agriculture

Healthcare & pharma

Marketing

ICT

40%

20%

20%

20%

Banking & finance

NGOs, NPOs & other associations


ICT

Small Companies (< 50 employees)

Contents

32

Sample profile

Aggregated results


Sector

Company size

Concluding insights

Executive summary

5

Concluding Insights• Accounting for 70% of both Egypt’s GDP and labor force, the private sector is key in

cushioning COVID-19’s impacts on the economy.• The government is already deploying a comprehensive EGP 110 billion economic package

to stimulate consumer spending, shield exports, encourage private sector and industrialgrowth, prevent layoffs and reduce cost pressures for various sectors hit by the pandemic.

• As the government deploys sector-specific reliefs, measures should support the areas mostaffected in each sector.

• On April 26, Egypt announced it was tapping the IMF for a one-year rapid financinginstrument (RFI) and a separate standby agreement (SBA) to help the country shield itselffrom the economic repercussions of COVID-19.

• The RFI will be directed towards Egypt’s balance of payment needs, which could beallocated towards foreign currency-earning sectors such as tourism, aviation, exports andthe Suez Canal.

33

AmCham Egypt

Thank you

34

© 2020 American Chamber of Commerce in Egypt (AmCham Egypt). This document can be shared as long as the source iscredited. This survey was conducted by AmCham Egypt; the data is current as of April 2020, and has been verified to the best ofthe publisher’s ability. Analysis is based on insights from AmCham Egypt's member companies and its 23 sector-basedcommittees.

amcham survey results - april 2020-final-may10pptx · about the survey sample § 103 companies from...

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