Businesses in Dubai foresee higher revenues and stronger ground ahead

DUBAI, Businesses in Dubai are confident of closing the year on improved revenues and a stronger footing with economic growth expected to gain momentum during the months ahead.

The quarterly business survey of Dubai Economy showed that the Composite Business Confidence Index, BCI, of local businesses increased 14.9 points and reached 129.8 points in the third quarter of 2019, from 114.9 points in the second quarter.

The Composite BCI for Q3 of 2019 has also gone up 11.3 points to 129.8 from 118.5 in the same quarter of the previous year, reflecting a remarkable improvement in the business environment and future outlook. On an annual basis, businesses are more upbeat about hiring, sales revenues and volumes on account of an expected improvement in business conditions, new projects, increased marketing activity, and optimism surrounding the upcoming Expo 2020.

Ali Ibrahim, Deputy Director-General, Dubai Economy, said, “The measures initiated under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, to reduce the cost of doing business and strengthen Dubai as one of the best investment destinations have contributed to the increasing optimism. Looking ahead, we see the momentum building up, notably with the countdown to Expo 2020 Dubai, which will further strengthen investor confidence in Dubai.”

Large companies continue to maintain stronger projections as compared to SMEs with Composite BCI scores of 135.6 and 121.1 points, respectively.

The services sector is more confident about its business prospects for parameters such as wage levels, sales revenue, volumes, profits, and hiring as compared to the manufacturing and trading sectors, with the travel & hospitality segment being the most optimistic about volumes for Q4 of 2019, registering a net balance of 78 percent, supported by expectations of a higher number of tourists.

The Composite BCI for exporters also displayed a year-on-year and quarter-on-quarter increase of 7.2 points and 2.9 points to 118.8 in Q3 of 2019 as compared to 111.6 in Q3 of 2018 and 115.9 in Q2 of 2019, respectively.

A delay in payments remains the primary challenge, as cited by 43 percent of firms, followed by competition (34 percent) and insufficient demand (17 percent).

Hiring intentions have also improved on a year-on-year and quarter-on-quarter basis, with net balance increasing from seven percent for Q4 of 2018 and 12 percent for Q3 of 2019 to 14 percent for Q4 of 2019, attributable to the expected rise in hiring in the manufacturing and services sectors. Those foreseeing an improvement in the business situation increased from 46 percent for Q3 of 2019 to 58 percent for Q4 of 2019, while the proportion of those expecting stability dropped from 43 percent to 37 percent during the same period.

Through the quarterly business survey, Dubai Economy seeks to gauge the perceptions of the business community. The overall scoring system is calculated by factoring in the weighted contribution of SMEs and large firms to Dubai’s overall GDP. The survey serves as an effective tool for measuring the pulse of the business community, whereby public and private sector participants can track and analyse major trends and issues regarding businesses in Dubai.

Source: Emirates News Agency