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Hopes of Higher Profits, Sales Boost UAE Business Optimism

DUBAI — Expectations of increased sales and profit levels across all business sectors have boosted optimism about the UAE economy, according to two latest surveys by business information providers.

The Business Optimism Index for the UAE released on Wednesday by Dun & Bradstreet (D&B) reveals that more than 90 per cent of businesses expect their sales to increase in the fourth quarter. Almost 80 per cent of businesses surveyed foresee a rise in new orders, and more than 90 per cent expect their net profits to increase while 53 per cent expect to increase their employee count to meet new orders and higher sales volumes in the forthcoming quarter.

The D&B findings come in the wake of another business survey by ‘Leaders Presents’ which said despite the soaring inflation and rising prices, doing business in the Gulf was still very attractive. More than 63 per cent of the regional leaders voted the UAE as the easiest country in the GCC to do business while Saudi Arabia is considered the most difficult (41 per cent). More than 50 per cent of the respondents ranked the UAE as the country most favoured by companies to do more business, followed by Saudi Arabia, Qatar, Oman, Bahrain and Kuwait.

According to the survey — which reflects the opinions of nearly 400 regional business leaders and key decision makers from across the region — more than 83 per cent of regional business leaders expect to increase the amount of business they do in the GCC over the next 12 months, and almost 80 per cent expect the profit they derive over the next five years from their GCC businesses to increase at a greater rate than the average profit expected to be derived from the rest of the world. “The UAE government’s efforts towards easing the process for establishing companies here are some of the noteworthy factors that have made the UAE one of the most attractive options for investors willing to venture into the region’s emerging markets. The biggest question is, is the current global economic crisis going to undo all the hard work already done by government?” said Lucy Mountain, Conference Director, Leaders Presents, which is organising the upcoming “Leaders in Dubai Business Forum.”

“Of the seven emirates, Dubai is clearly the most favoured, with almost 51 per cent of companies saying they do most of their GCC business in the emirate, and 17 per cent saying they want to do more business in Abu Dhabi. Only 7 per cent of the respondent companies said they are doing most of their GCC business in emirates other than Dubai or Abu Dhabi. The GCC countries in general are experiencing a rapid growth fuelled by rising population numbers and an increase in national income. The high rate of per capita affluence along with the new reforms are big contributing factors towards attracting more businesses, which also facilitates further investments into those markets,” said Mountain. Rajesh Mirchandani, CEO of D&B said while the full effect of the global economic downturn and US financial crisis on the UAE economy is yet to be determined, the results of the Business Optimism Index evidently point towards strong business sentiments and significant expansion across all sectors in the economy. “Over 50 per cent of businesses state that business expansion is at the top of their investment agenda in the next quarter, indicating that the UAE is bucking the global downward trend, and continues to be an attractive place to do business.”

— issacjohn@khaleejtimes.com