Dubai’s Business Confidence Index (BCI) stands at 113 points in Q1 2013
98% of companies plan to either to increase or maintain their employment count
Dubai: Businesses in Dubai are confident of growth trends continuing to the second quarter of 2013, according to the quarterly business confidence survey conducted by Dubai’s Department of Economic Development (DED).
While optimism runs across the whole economy, it is particularly high among small and medium enterprises (SMEs) and exporting firms as reflected in the composite Business Confidence Index (BCI), which stood at 113 points during the first quarter of 2013, according to a survey.
The survey showed that 86 per cent of the businesses are upbeat on sales and profits and 98 per cent plan either to increase (23 per cent) or maintain (75 per cent) their employment count during the next quarter. Overall business expectations are on an upward trend with 91 per cent of firms reporting either improvement or stability in business conditions in the second quarter of 2013, it noted.
“Economic activity in Dubai is on a firmer ground, especially with key sectors such as tourism, logistics and aviation flourishing and real estate on a recovery path. The services and retail sectors are also signalling strong growth, which reaffirms Dubai’s reputation as a resilient and vibrant economy,” commented Sami Al Qamzi, Director General of DED.
“Rising confidence among SMEs and exporters also shows that the combined effort of the government and the private sector to achieve sustainable economic development is producing the desires outcomes,” added Al Qamzi.
The survey reveals robust expectations, with 55 per cent of businesses expecting higher sales revenues and another 30 per cent stable sales in the second quarter of 2013. The revenue growth will continue to be driven by rising real business activity (volumes), as 80 per cent of respondents expect prices to remain largely stable. A few companies (13 per cent) plan to raise their prices in the second quarter of 2013 as they return to the pre-discount season price levels or renew orders at higher prices.
With respect to sales volumes, 54 per cent forecast an increase during the second quarter of 2013 and as a result, 49 per cent of the firms are also planning to increase their purchase orders to ensure adequate stocks to meet the expected demand. In terms of sectors, manufacturing businesses are most optimistic about sales and profits whereas service firms are most upbeat about new hires.
More than half (55 per cent) of the companies said they will invest in capacity expansion during the next 12 months. This proportion is slightly higher among larger companies. Furthermore, 40 per cent of the respondents plan to invest in upgrading technology over the same period.
