Dubai business confidence up
Confidence among Dubai businesses increased in the first quarter of 2018 and executives are even more confident about the second quarter.
dubai — Confidence among Dubai businesses increased in the first quarter of 2018 and executives are even more optimistic about the second quarter, thanks to rising oil prices and brighter global economic prospects, as well as better sales, profits and new orders for local firms.
According to a Department of Economic Development (DED) survey released on Saturday, the Composite Business Confidence Index improved 5.5 points to 116.7 in the quarter compared to 111.2 during the same period last year.
“The brighter global economic prospects, coupled with strengthening oil prices and improvement in global trade are supplementing Dubai’s continued investment in infrastructure, diversification, and economic transformation to a knowledge-based economy. These developments have translated into better returns on investment and are contributing to an expected pickup in growth from 2.8 per cent in 2017 in real terms to an anticipated 3.5 per cent in 2018,” it said.
The survey results showed that the outlook for the second quarter appears to be even more promising as businesses are anticipating better outcomes on revenues, sales volumes, profits and new orders.
“Looking ahead, the continued drive to meet Expo 2020 infrastructure needs, the easing of the fiscal adjustment in the emirate, and the recent announcements by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, VicePresident and Prime Minister of the UAE and Ruler of Dubai, of a freeze in government fees for the next three years, and new measures to boost investment and cut cost of doing business are all adding to the upbeat business sentiments,” the DED said. At the sector level, the trade segment appears to be the most confident about its business prospects in terms of revenues, selling prices, profits and new purchase orders. Auto traders are optimistic of higher volumes during the second quarter with a net balance of 75 per cent based on higher demand. Exporters are more upbeat than domestic market-oriented firms across all the parameters in the survey. The services sector is the most optimistic about its hiring expectations.
Half of the survey respondents expect the business situation to improve in the second quarter compared to 41 per cent in the previous period. While 40 per cent of the respondents expect more stable conditions, the survey also indicates
The brighter global economic prospects, coupled with strengthening oil prices and improvement in global trade are supplementing dubai’s continued investments DED report
that 49 per cent of the respondents do not expect any negative factors to impact their business operations. Competition remains the topmost challenge for firms operating in Dubai, as cited by 19 per cent of the respondents.
In terms of expanding capacity and upgrading technologies, around 71 per cent of businesses were planning to expand their capacity as against 61 per cent in the same quarter of 2017.
About 68 per cent of the respondents were gearing up to upgrade technology in the first quarter versus 69 per cent per cent in the fourth quarter and 65 per cent the same period last year.
The survey was conducted taking a sample of 502 companies across Dubai and they were asked to indicate if they anticipated an ‘increase’, ‘decrease’ or ‘no change’ on key outlook indicators, including sales revenues, selling prices, volumes sold, profits and number of employees.
— waheedabbas@khaleejtimes.com