Dubai: Traders in the UAE reported one of the highest levels of confidence globally, second only to those in the country's largest trading partner, India, according to the HSBC Trade Confidence Index (TCI) released yesterday.
The UAE results showed a slight drop from the first half of the year, when the country reported the highest levels of confidence globally, to report an index score of 125.
Saudi Arabia registered a score of 118, above the global average of 116, and in line with the overall emerging markets average of 120.
"The recent scores have levelled as traders in the region got back to business after a turbulent period in 2009, and return to growth in early 2010," said Kersi Patel, Head of the Trade and Supply Chain at HSBC Middle East and North Africa.
Increased finance
"This focus on growing ‘real' business has resulted in many companies trusting the financing and security of their trade receivables to the banks. Roughly half of the UAE respondents see a requirement for increased trade finance in the coming months," he said.
Federal Customs Authority data show that the UAE's total non-oil trade increased by 8.71 per cent in the first half of this year to almost Dh352 billion, compared to Dh323.7 billion in the same period of 2009. Exports showed a 21.28 per cent increase in the same period.
The results of the TCI underline the critical role of China and Southeast Asia to traders in the Middle East. The index shows that 60 per cent of traders in the Middle East report that they are currently trading with greater China, and 33 per cent identified this region as one of the most promising areas for growth in the coming six months.
The UAE has remained among the top five nations since the confidence survey was launched in the first half of 2009.
"The most significant finding from this fourth edition of the TCI is that all 17 countries surveyed have shown increased confidence for the first time since the global economic slowdown," Patel told Gulf News.
"This does in fact mean more opportunity for a trade-focused country such as the UAE."
Although the index does display a slight drop in confidence in the UAE compared to the first half of the year, "the positive message continues," Patel said.
"Some of the businesses surveyed felt more confidence in the first half because it was a clean sheet, a new year, a new start. These may now have moved into the mode of maintaining business vel-ocity," he said.
The HSBC survey is the only one of its kind that happens globally. The latest edition covered 5,124 exporters, importers and traders in 35 cities found in 17 countries in emerging, as well as developed, markets.
It covered 304 exporters and importers in the UAE, including 195 in Dubai, 58 in Sharjah and 51 in Abu Dhabi.
"India has assumed the top spot on the index. Being the UAE's largest trading partner, this will have a positive impact," Patel added.
Trading partners
A majority of the HSBC survey's respondents in the UAE said their main trading partners were in the Middle East (63 per cent), greater China (49 per cent) and the rest of Asia (49 per cent).
As many as 53 per cent of respondents said the Middle East is the key growth area for trade, with Africa, China and the rest of Asia, coming in second, third and fourth respectively.
"This proves that the UAE continues to be the port of entry into the region," Patel said.
"Trade success often depends on the level of confidence of your trading partner. Since the Middle East, China and India come in high on the confidence index, this is good news for UAE traders," he added.
