Why Dubai firms are upbeat on Q3

Business leaders in Dubai are more upbeat about their expectations of business conditions and business confidence in the third quarter of 2017, according to a new survey conducted by the Dubai Chamber of Commerce and Industry.

With Dubai outperforming global economic growth and defied downward trends that prevailed worldwide in 2016, business leaders are increasingly upbeat about an upswing in business conditions in the third quarter.

The Business Leaders' Outlook Survey revealed that 39 per cent of respondents expect to see business conditions improve in the third quarter while 43 per cent expect no change in business conditions and 18 per cent expected conditions to worsen over the same period.

Expectations for access to financing, manpower quality, and access to facilities and infrastructure all saw quarter-on-quarter improvements in third quarter.

Survey respondents identified high commercial rents and licensing fees, as key challenges for which government action is needed. They also called for more government support on regulatory matters such as settling late payments, while they also suggested the introduction of long-term residency visas to reduce the cost of doing business.

The chamber survey revealed that 45 per cent of business leaders expected business confidence to strengthen in the third quarter of this year, compared to the 37 per cent who predicted no change and 18 per cent who expected confidence to weaken during the quarter.

Sheikh Ahmed bin Saeed Al Maktoum, Second Deputy Chairman of the Executive Council, President of the Dubai Civil Aviation Auhtority, Chairman of Emirates airline and Chief Executive of the Emirates Group, said recently that Dubai's economy is poised to expand further over the next two years, driven by major investments as well as tourism, real estate and manufacturing sectors.

Jihad Azour, the International Monetary Fund's Middle East and Central Asia Department director, recently said Dubai's gross domestic product would likely accelerate this year at a faster pace than most Arab economies, underpinned by local spending, including investment in preparation for Expo 2020, and a pick-up in global trade.

"The easing of visa restrictions on Indian, Chinese and Russian tourists was seen by 57 per cent of respondents as having a positive impact on overall business confidence," the chamber said in a statement.

Hamad Buamim, President and CEO of Dubai Chamber, said the latest survey reflected a higher level of business confidence for the third quarter of 2017, despite the high number of residents who travel abroad for summer holidays during this period.

The survey found that small and medium-sized enterprises were more optimistic than large companies in their expectations about business confidence and business conditions in Dubai during the quarter.

While 49 per cent of SME respondents said they expected business conditions to improve in the third quarter of this year compared to 25 per cent of large companies, nearly half of those expected business confidence to strengthen in third quarter, compared to 38 per cent from large companies.

Buamim said the growing confidence came in line with an increase in the number of new companies joining Dubai Chamber in the third quarter, which is an indicator of business activity in the emirate.

He described the survey as a useful tool to take the pulse of Dubai's business community, gain valuable perspectives and insights, and gauge the future outlook for business leaders.

Price competition, debt collection, payment defaults, and high employment costs were cited as the key limiting factors impacting businesses' third quarter operations, in addition to the high costs of capital, bank services, and raw materials.

Source: Khaleej Times