Business | General
Channel Sponsor
UAE businesses stay positive
Business sentiment in the UAE is still strong despite the global economic downturn, but many local companies are growing worried about the rising inflation and the declining labour supply, a survey has revealed.
- By Cleofe Maceda, Staff Reporter
- Published: 00:13 October 9, 2008
Dubai: Business sentiment in the UAE is still strong despite the global economic downturn, but many local companies are growing worried about the rising inflation and the declining labour supply, a survey has revealed.
According to the first edition of the Business Optimism Index released on Wednesday by business information provider Dun and Bradstreet (D&B) and The Khoie Group, 50 per cent of the trade, transport and communication companies in the UAE are concerned about the rising cost of doing business.
Inflation is also a major concern for 40 per cent of the financial enterprises, 38 per cent of real estate firms and 45 per cent of all manufacturing firms.
The shortage of labour is perceived to be a serious threat by 35 per cent of respondents among the construction, real estate and business services companies and 45 per cent of the manufacturing enterprises.
"In the real estate and manufacturing sectors, businesses are worried about the availability of skilled labour that they need for their operations. Many of the countries who traditionally supply labour to the UAE now have high growth rates, so the flow of workers from them has tapered out," Rajni Thakur, a senior economist at D&B told Gulf News.
The survey covered responses from 250 company owners and senior executives across various sectors to assess the business community's confidence in the economy.
Respondents were asked how they were inclined to view the current trade environment and the direction they saw their business heading.
Fourth quarter hopes
"All the business units feel that inflation has been persisting and is expected to continue. It is the biggest factor impacting their business. There's also a big concern about the availability of skilled labour," Thakur told a press briefing.
However, the survey found that 90 per cent of businesses expect their sales to increase in the fourth quarter, and almost 80 per cent foresee a rise in new orders and over 90 per cent expect their net profits to increase.
More than half (53 per cent) of the surveyed traders also expect to hire more employees to meet new orders and achieve higher sales volumes in the next quarter.
While the full effect of the economic crisis on the UAE economy has yet to be seen, over 50 per cent of the companies put expansion on top of their agenda.
This only indicates that the UAE is "bucking the global downward trend and continues to be an attractive place to do business," according to Rajesh Mirchandani, chief executive officer of D&B South Asia Middle East.
Frank Khoie, chief executive officer of The Khoie Group, said the UAE remains insulated from the troubles hounding the foreign markets, thanks to the country's attractive real estate sector.
"Whenever there's a slowdown on the stock market, the individual investor takes the money out and put it in real estate and, today, there's probably no other geographic location on planet earth that is as attractive as the UAE to put your investments in," said Khoie.
High domestic demand
"The UAE enjoys high domestic demand. Most of the business units are producing more, selling more and getting more profits rather than just meeting external demand.
"That's what's driving the optimism in the business community amid the crisis," said Thakur.
Share this article
More from Business General
More from Business
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
Experts seek solutions to global gloom
Suggestions formulated in Dubai will feature in next year's WEF
-
Qatar benefits from diversification
Doha's readiness to look beyond hydrocarbons as a growth engine bodes well
-
When the Web lives worldwide
Cutting-edge firms are building massive data facilities all over the globe
