Egyptian manufacturers have cut output because banks are closed while labour unions have taken the country's revolution as a cue to stop work and demand better pay and conditions, industry managers said.

The military-backed government has slashed its forecast for economic growth and the army urged Egyptians on Monday not to strike, appealing to their sense of national duty.

Stoppages would be disastrous for the economy, military officials were quoted as saying in our sister publication, the Gulf Daily News.

But unions, emboldened by the overthrow of President Hosni Mubarak last week, are still pressing their demands. More than 12,000 workers at state-owned Misr Spinning and Weaving went on strike yesterday. In the coastal city of Damietta, about 6,000 spinning and weaving workers were also striking.

Eleven flights were cancelled at Cairo airport as customs officials and maintenance staff stepped up industrial action.

Airport officials said they were looking into demands for better health, transport and other benefits.

In sectors not hit by strikes, the central bank's decision to keep banks closed was forcing many to scale back production because clients were unable to pay for the goods.

The political instability has prompted many buyers of industrial goods to close for business, said Mohamed Said Hanfy, general manager at the Chamber of Metallurgical Industries.

Hanfy said the group's members, which include leading heavy industrial firms, were forced to operate at between 20 and 50 per cent of capacity and employ extra security to protect stocks which are piling up.

"When the banks open again I think the utilisation rate will rise to 50-60 per cent," he said. "But until security is assured and the police are in control of everything, a lot of people will be afraid to work."

Some food and textile producers are also suffering strikes or have sent workers home for fear that industrial action will spread. – TradeArabia News Service