CAPMAS reports production surge in early 2014, but actual economic growth unclear

Egypt’s industrial output rose to LE85.1 billion in the first quarter of 2014, a 5.1 percent hike from the previous quarter and a 5.1 percent hike compared to the same quarter in 2013, state statistics agency CAPMAS announced in a report.

Food products make up 13.1 percent of production value, according to the agency. The sector generated LE21.6 billion between January and March, 2014, a 19.8 percent increase from the last quarter and the same period in 2013. CAPMAS attributed the growth to a flourishing sugar industry.

After struggling in late 2013, the iron and steel industry appears to be picking up again. While production reportedly dropped by 0.88 percent to reach 9.2 billion at the end of 2013, in the first quarter of 2014, the sector grew by 18 percent to reach LE10.9 billion.

These high industrial production rates far outstrip the economy as a whole. According to the Central Bank of Egypt, real gross domestic product (GDP) grew by only 2.5 percent in the same quarter.

However, the CAPMAS figures only include companies with more than 25 employees, a small minority in an economy dominated by small and micro-enterprises. Although the agency’s research methods are not public, their reports are also unlikely to include accurate data on Egypt’s enormous informal sector, which experts believe makes up 40 to 65 percent of the economy. A recent report by the Egyptian Center for Economic Studies estimated that around 40,000 factories operate informaly in Egypt.