Business sentiment in Gulf defies gloom

Most executives across the region are upbeat concerning their shortterm investment plans

Confidence of business owners in the UAE and the rest of the Gulf Cooperation Council (GCC) region is holding up despite the current challenging economic climate.

A survey conducted among 196 business leaders in the GCC over the past six months showed that business sentiment across the region remains “broadly positive,” with more than half (52 per cent) of them saying they are “likely or very likely” to invest in the coming 12 months.

The Business Barometer: GCC CEO Survey was conducted by publishing, research and consultancy firm Oxford Business Group (OBG) in association with Saudi Hollandi Bank. Respondents were asked a number of questions on an anonymous basis to measure their confidence levels and short-term investment plans.

“Despite global media reports that the region is in a period of economic turmoil, our [survey] results point to a wholly more positive outlook, with sentiment across the sectors far from weak,” said Oliver Cornock, OBG managing editor for the Middle East.

Survey

Less than half of the respondents said that getting credit these days is still “easy or very easy,” while nearly six in ten (57 per cent) believe that spending by the government drives less than 40 per cent of business in their respective sectors.

OBG’s findings echoed the results of another recently released survey which found that global business confidence in the Middle East has improved despite economic growth in the region being at a 30-year low.

The latest Global Economic Conditions Survey (GECS) from the Association of Chartered Certified Accountants (Acca) and Institute of Management Accountants (Ima) showed that global businesses are now more upbeat about the region. The business sentiment level is at a 12-month high, boosted by increased prospects of government spending and recoveries in China and North America.

Lindsay Degouve de Nuncques, head of Acca Middle East, also noted that the UAE is in a stronger position than many other economies in the region.

“The UAE is starting to reap some of the benefits after some tight fiscal measures following the oil price slump. The budget is now in surplus, which means that businesses are feeling more confident that investment may no longer continue to fall and may even start to improve soon,” Nuncques said.

“The confidence survey highlights that falling state spending and business investment since the fall in oil prices continues to offer a downbeat outlook for many firms in the Middle East, although many are feeling optimistic that they are over the worst,” Nuncques said.

OBG managing editor for the Middle East