Dubai: 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 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.
Other experts are also saying that the UAE is in a better position to weather the turmoil compared to its peers in the GCC region. Lindsay Degouve de Nuncques, head of the Association of Chartered Certified Accountants (Acca) Middle East, said that the UAE is starting to reap some of the benefits after implementing tight fiscal measures following the decline in oil prices.
"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," she said.
Less than half of the respondents in Oxford's survey 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 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.
Overall business confidence in the region, however, is still lagging behind other markets outside Africa or the Caribbean, with nearly half of the respondents (44 per cent) admitting that conditions have worsened.
“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.
The findings were based on the answers gathered from more than 1,512 finance professionals and more than 150 chief financial officers around the world. The global confidence, which is at a 12-month high, has been boosted by increased prospects of government spending and recoveries in China and North America.
