It is business as usual in the economies of the six-nation Gulf Cooperation Council (GCC) countries when it comes to the ability of locally-listed firms of registering gorgeous profits. Recently-released statistics put combined net profits of 543 listed companies at $14.5 billion (Dh53.24 billion) during the first quarter of 2012. This represents a notable increase of 12.9 per cent of net income compared to the same period in 2011.

Undoubtedly, this level of profit-making says a great deal about the current status of business activities in the region. At the very least, the economies are doing fine, with consumers having the ability and willingness to spend. Needless to say, per capita income in Qatar, put at a whopping $107,000 per annum, is second to none in the world. What’s more, Qataris are noted for spending and investing rather than saving.

Part of the credit goes to the authorities and their determination of augmenting public sector spending with all the positive spill-over effects on the economic situation. Continuing the Qatari example, the budget for fiscal year 2011-13, which got under way in April, projects expenditures of a record $48.9 billion, showing growth of 27 per cent.

Certainly, a sizeable amount of this figure ends in local economy through expenses made by Qatari and foreign nationals. The majority of Qatari nationals work for public sector establishments.

At any rate, profit making is not a one-time phenomenon, as GCC listed firms achieved a 30 per cent growth in net income level to arrive at $52.2 billion for the entire 2011. The fact that listed companies are capable of posting such high-level profits says a great deal about ongoing commercial activities in the six-nation grouping.

In another positive sign, market capitalisation of listed firms grew by $87 billion to reach $810 billion by end-March 2012. In retrospect, the year 2011 ended with a total market capitalisation of $723 billion for all GCC bourses combined.

Still, last year could not be remembered with regard to performance of GCC bourses, as all except that of Qatar reported a drop in index. In fact, the Qatari index grew by a mere 1.1 per cent though regarded as exceptional compared to the performance of other stock markets. For example, Bahrain’s bourse dropped by some 20 per cent, the worst performance amongst counterparts in GCC, followed by 16 per cent for each of Oman and Kuwait.

Nevertheless, other signs of concrete evidence are required to suggest return of comprehensive normality to the business community, namely issuance of initial public offerings (IPOs). The first quarter witnessed issuance of two IPOs raising a mere $78 million. For comparative purposes, there was only a single IPO in the first quarter of 2011 but three IPOs were raised in the fourth quarter of last year.

Not surprisingly, Saudi Arabia’s Tadawul hosted both IPOs issued in the first quarter of 2012. Suffice to note that the Saudi bourse accounts for half of market capitalisation of GCC stock markets. In retrospect, Saudi Arabia accounted for 55 per cent of funds raised through IPOs in all of 2011.

It is not wrong to link part of the capability of GCC firms in recording profits to their dependence on local consumption rather than reliance on export markets. On the macroeconomic side, GCC economies are heavily dependent on the export markets especially the petroleum sector at large.

But the story is not the same with regard to the microeconomic part of the equation, as many firms rely on domestic consumption rather than international demand for their well-being. Happily, local economies are performing well for reasons including sharp governmental spending.