What's driving Egypt's rise in employment?

Over the past few months, Egypt has seen a gradual rise in employment, particularly in its non-oil sectors. According to the latest Purchasing Managers’ Index (PMI) report, September 2024 marked the third consecutive month of employment growth, especially in the construction and retail sectors. This positive trend, however, coexists with some critical challenges in the labor market.

Rising employment amid economic struggles

While employment in non-oil sectors has increased, Egypt’s overall PMI index dropped slightly below the neutral threshold, signaling tough business conditions. A slowdown in consumer demand, alongside the rising cost of raw materials, has made it difficult for many companies to thrive. Yet, many businesses continue hiring, reflecting optimism for future recovery despite current economic hurdles​. (according to EgyptToday)

The Government's ambitious plans

In response to these challenges, Egypt's government has set an ambitious goal to create 8 million jobs by 2030. This strategy aims to spur long-term growth by fostering a better business environment and attracting foreign investment. Efforts like the “Haya Karima” initiative, which focuses on improving rural living conditions, are expected to contribute to job creation across various sectors​.

Challenges facing job seekers

Despite the growth in employment, several significant obstacles remain, particularly for young people and new graduates. Youth unemployment continues to be disproportionately high, particularly among women and university-educated individuals. This is partly due to a mismatch between the skills taught in higher education and those demanded by employers, a global trend mirrored in Egypt​.

Additionally, the informal sector still plays a large role in Egypt’s economy, which leaves many workers without formal contracts, social security, or job stability. For many young job seekers, the lack of practical skills and experience further complicates their entry into the labor market​.

The growing need for skilled workers

As the economy modernizes, there is an increasing demand for skilled labor, especially in sectors such as digital marketing, technology, and sales. Employers often struggle to fill these positions due to a widening gap between the skills taught in universities and those required in the workforce. This skills shortage has been identified as a major barrier to economic growth, and many companies are now investing in upskilling programs to address this issue​.

A path forward

For Egypt to sustain its employment growth and meet the needs of its evolving economy, it will need to focus on enhancing the skills of its workforce, particularly in the digital and technology sectors. By addressing these challenges, Egypt can continue its positive employment trends while ensuring that both businesses and job seekers are prepared for the future.