Business leaders are expecting double-digit revenue growth next year, offsetting damage from short-term supply chain disruption by pushing into new markets to reach more customers, according to new research from HSBC.
HSBC’s Navigator: Voice of Business report, which polled over 7,350 business decision-makers from 14 global markets in October 2021, including 519 from Egypt, found that more than two thirds of Egyptian businesses (68%) expect overall revenue to grow by more than 10% over the year and more than one in five (22%) expect growth to exceed 20%.
Todd Wilcox, HSBC Egypt Deputy Chairman and Chief Executive Officer, said: “Our HSBC Navigator study indicates companies are firmly back in growth mode. Egyptian businesses are optimistic and expect to return to pre-COVID levels of profitability by 2022. International expansion is at the heart of this growth with a desire to build back better by considering a broader range of Environmental Social Governance (ESG) factors in their business and supply chain”.
Despite a more positive outlook, supply chain disruption this year has created challenges that businesses need to overcome to achieve their growth ambitions.
Businesses in Egypt were more likely to anticipate a big disruption to their supply chain, with more than two in five (42%) expecting these challenges compared to 22% globally. The perceived impacts of these disruptions were also greater than those of their international peers as Egyptian businesses claimed an average expected impact to revenue of 29%, six points above the global average.
“Overall, companies are showing remarkable agility in navigating the changing trade landscape. They share the same concerns as their global peers around resurgence of COVID-19 and inflation. However, they are adapting their business plans to position themselves to succeed by diversifying their international suppliers and expanding into new markets,” said Rehab Tamam, Head of Global Trade and Receivables Finance, HSBC Egypt.
Almost three quarters of businesses in Egypt (74%) increased the number of suppliers they are working with in a further move to greater diversification. Egyptian businesses are also more likely than their international peers to consider expansion into new markets, with almost one third (33%) noting this was a priority.
With Egypt hosting COP27 next year, sustainability is high on the agenda for future-focused companies looking to transform their business in the longer term. 38% of businesses are putting more than 10% of their operating profit towards becoming more sustainable.
“We are witnessing an increased interest in sustainable and transition financing as businesses in Egypt and the wider region seek to transform their business models to lower carbon emissions. Supporting our customers on their respective journeys is part of HSBC’s own commitment to helping lead the transition to a net zero global economy,” added Wilcox.
