Saud Swar Image Credit: Supplied

Dubai: Middle East businesses are confident in the economic growth prospects for the year ahead and executives are willing to invest further in their businesses, according to the 2018 Global Business & Spending Outlook, a survey released today by American Express Middle East.

The vast majority of respondents from the region, more than 90 per cent, anticipate modest to substantial economic expansion in their country, closely aligned with the worldwide trend average of 85 per cent.

The survey results showed three quarters of the region’s finance executives (74 per cent) plan to increase spending and investment levels by 6 per cent or more. The five countries with the highest investment growth in the world are China (90 per cent), followed by Japan (87 per cent), UAE (84 per cent), Saudi Arabia (83 per cent), with Russia (80 per cent) completing the top five.

“This prevailing optimism is tempered with smart strategies as we’re seeing spend directed to specific growth initiatives such as meeting customers’ evolving needs and emerging technologies that support the need to innovate,” said Saud Swar, vice-president of Commercial Business & head of the UAE operations at American Express Middle East.

The survey is a joint American Express and Institutional Investor study based on a survey of 870 CFOs and other senior finance executives at companies with annual revenues of $500 million (Dh1.83 billion) or more from more than 21 countries worldwide. The study includes respondents from the Middle East region representing 17 per cent of the sample, compared to 18 per cent from North America, 11 per cent from Latin America, 32 per cent from Europe, and 21 per cent from the Asia Pacific.

Findings from the study suggest that economic, political, social and environmental uncertainty has become the new normal. Almost three quarters (73 per cent) of respondents said that their spending and investment plans are not impacted by domestic or economic risk.

However, more than three quarters (77 per cent) said they are interested in expanding enterprise-level risk management systems or process improvements, and if pushed over by unanticipated economic headwinds, eight out of ten executives are likely respond by moving business to lower-risk geographic areas.

Customer focus

The study finds the vast majority of Middle East business leaders will pursue goals tied directly to the core organic growth of their business. This has led 77 per cent of Middle East respondents to place ‘better meeting customer needs’ as the top business priority.

The majority are planning strategic manoeuvres such as penetrating new markets (66 per cent), followed by business transformation and innovation (44 per cent). Saudi Arabian executives stand out as the most eager among their peers to expand into new markets (83 per cent).

Mobile technology is expected to see an increase in spending in the region and worldwide. Other high-priority spending categories in the Middle East include transportation and logistics services (31 per cent) and travel and entertainment (30 per cent).

Job growth

An increase in the workforces of Middle East companies is anticipated in the year ahead. Nearly all regional respondents (73 per cent) expect at least a 6 per cent increase in their companies’ number of employees. As companies look to do so, respondents have cited sales, marketing and administration support staff as the categories of employees that are most difficult to hire and retain (47 per cent each).

And to meet their growing staffing needs, companies in the Middle East are likely to expand their use of temporary and part-time workers (59 per cent) and on-shore (43 per cent) — by moving positions from overseas to domestic locations, as opposed to outsourcing and offshoring (just 19 per cent).