Upbeat 2018 outlook spurs Dubai business sentiment
dubai — Driven by increased demand during the winter months, businesses in Dubai, mostly those in services and manufacturing sectors, are more upbeat about the final quarter of 2017 compared to the previous quarter, Dubai Economy said on Sunday.
A survey by Dubai Economy shows that the outlook for the fourth quarter 2017 is stronger than the previous quarter across all the parameters, supported by expectations of a higher number of tourists during the winter season, more customers, new projects and government support for Expo 2020 oriented businesses. The quarterly survey of Dubai Economy shows that the structural reforms and economic diversification in Dubai along with a strong forecast from the International Monetary Fund (IMF) have apparently fuelled business confidence after subdued growth in 2016.
The IMF has forecast UAE’s GDP to grow 3.5 per cent in 2018 compared to 2.9 per cent and 3.3 per cent in 2016 and 2017, respectively, largely on the back of improved non-oil sector growth and stronger external demand. The survey shows that the composite Business Confidence Index (BCI) in the third quarter increasing by 10.8 points and reaching 121.4 points, from 110.6 points in the second quarter of 2017.
A joint report by the Institute of Chartered Accountants in England and Wales and Oxford Economics said the UAE would record an accelerated growth in 2018 to 3.6 per cent from 1.7 per cent in 2017. The momentum will further gain pace in 2019 to post 3.6 per cent growth.
The Institute of International Finance (IIF) affirms that the UAE is on track to be one of the best performers among the Middle East and North African economies over the next five years as its vibrant growth continues to be driven by trade and tourism.
“The UAE continues to be the best managed economy in the region. It possesses large financial buffers — estimated at around $670 billion, safe-haven status, excellent infrastructure and a relatively diversified businessfriendly economy, which will help the economy cope with the prolonged low oil price environment,” the IIF said.
In Dubai, large companies are more optimistic than the small and medium enterprises with respect to the business outlook, with composite BCI scores of 126.5 points and 113.8 points, respectively. The services sector is most optimistic regarding its outlook for volumes for the fourth quarter of 2017, followed by the manufacturing sector, Dubai Economy said in its report.
“Exporters are less bullish than the overall business community, with composite BCI scores of 111.8 and 121.4 points, respectively. Domestic market oriented firms hold stronger predictions than exporters for sales revenues, selling prices, volumes, net profits and hiring,” Dubai Economy said.
The proportion of firms that anticipate an improvement in the business environment stands at 48 per cent for the fourth quarter compared to 39 per cent for the previous quarter. Additionally, 29 per cent of the survey respondents do not anticipate any obstacles to their business operations during the final quarter of 2017. Plans to upgrade technology have strengthened both on a quarterly and annual basis.
— issacjohn@khaleejtimes.com