Malls in Dubai continue to attract shoppers despite the threat of coronavirus. Business in the UAE are more optimistic than their global peers despite the impact of COVID-19 pandemic, according to a survey by HSBC. Image Credit: Clint Egbert/Gulf News

Dubai: Business in the UAE are more optimistic than their global peers despite the impact of COVID-19 pandemic, according to a survey by HSBC.

Businesses surveyed in the UAE say they have adapted to the changing environment, and while optimism has naturally dipped since 2019, UAE companies are more optimistic than the global average.

More than three fourth (78 per cent) expect their business outlook to stay the same or become more optimistic, compared with 67 per cent globally. Within this, close to half (48 per cent) of all UAE businesses surveyed feel more optimistic.

A vast majority (90 per cent) of respondents from the UAE expect to return to pre-Covid profitability levels by the end of 2022 (compared with 81 per cent globally), which includes 18 per cent that are either ahead or expecting to be back there by the end of this year.

HSBC Navigator draws from a survey of over 10,368 companies in 39 markets, including 151 companies in the UAE and another 560 in the wider Middle East, North Africa and Turkey (MENAT) region, making it the largest survey of its kind.

Increasing investments

The HSBC report also reveals that businesses in the UAE recognise the need to invest for future growth, with 81 per cent of respondents intending to increase their investment in their business next year, compared to 67 per cent globally. The three most commonly cited investment priorities are product and process innovation, marketing and the customer experience.

“UAE companies have always been resilient and innovative. Despite the slowdown during the pandemic, business is slowly returning to pre-Covid levels and companies are finding ways to maximise their potential, adapt to the new environment and really focus on sustainable measures that will help their companies grow and be able to future-proof them from unexpected disruptions,” said Daniel Howlett, HSBC’s Regional Head of Commercial Banking, Middle East, North Africa and Turkey (MENAT).

While 74 per cent of businesses from the UAE feel that international trade has become more difficult due to impact of events in the last 12 months, their commitment to pursuing international opportunities appears undiminished. When asked about their outlook on international trade, most UAE companies (90 per cent compared with 72 per cent globally) said they have a positive outlook over the next 1-2 years. Less than a tenth (8 per cent) have a negative outlook, compared with 22 per cent globally.

In response to the challenging international trade environment this year, HSBC accelerated its long-term commitment to digital banking. In the first nine months of the year, around 70 per cent of the $43 billion of trade financed by HSBC in the Middle East was processed digitally, compared to around 54 per cent processed digitally prior to Covid-19.

Focus on sustainability

The Navigator report illustrates how sustainability is an important focus for business leaders. Over 85 per cent of companies in the UAE have set targets for a broad range of aspects of Environmental, Social and Governance (ESG) issues and more than four-fifths are measuring environmental and social aspects of sustainability. Almost all companies in the UAE (99 per cent) see multiple opportunities from improving their environmental and ethical sustainability, the three most important being increased customer demand, attracting investment and promoting employee well-being.