Gulf enterprises optimistic about outlook for growth

Dubai: Gulf businesses are among the most optimistic in the world about the impact of increased globalisation.

Many regional businesses said they planned to expand in the next two years despite the impact of the global financial crisis, according to a global study by the Institute of Chartered Accountants England and Wales (ICAEW).

According to ICAEW Global Enterprise Survey 2010, Gulf businesses scored among the highest when it came to being positive about the impact of increased globalisation.

About 70 per cent have plans to expand into or increase their market share in other countries in the next couple of years.

They said key strategies included adapting their products or offering higher value-added products or services.

Of those planning to boost their foothold outside their home countries, more than half of those surveyed said they planned to increase market share or expand in neighbouring countries.

One third of these businesses were planning an expansion into Asia-Pacific and Africa.

"The Gulf is typically seen as a gateway both to Africa and Asia because of its geographical position," said Amanda Line, Regional Director, ICAEW Middle East.

"No other region surveyed plans to focus as much on Africa as the Gulf countries. However, while businesses see opportunities, they also face hurdles."

Annual turnover

According to the global study, the proportion of businesses planning annual turnover growth of six per cent or more was significantly high in the Asia-Pacific, Africa and the Gulf region compared to the rest of the world.

In the Asia-pacific and Africa regions 71 per cent and 76 per cent of enterprises respectively said they expected their business turnover to grow more than six per cent in the next two years.

A total of 65 per cent of businesses in the Gulf said they expected their turnover to exceed six per cent in the next two years. The survey also found that 88 per cent of respondents in the Gulf expected an increase in profitability in the next two years.

A total of 83 per cent of those surveyed said they wanted to increase the shareholder value over the same period.

Businesses across the Gulf have been adversely impacted by changes in access to finance with all seeing this as a negative influence on competitiveness.

Access to finance has been a particular challenge for Gulf businesses in the past year, with around a quarter of them stating that changes in interest rates, raw material costs and exchange rates had also had a negative impact on competitiveness.

Access to finance

However, looking ahead, access to finance was rated as one of the factors expected to have the most positive influence on their business in the next year.