- Substantial improvement in business confidence and expectations point to stronger economic performance over the last quarter of 2011
Businesses in Dubai expect a stronger performance in the last quarter of 2011, according to the findings of the most recent quarterly survey conducted by the Department of Economic Development (DED).
A representative sample of 500 companies, including small and medium enterprises (SMEs) and export-oriented businesses were surveyed in order to gauge perceptions and future outlook among entrepreneurs and investors in Dubai.
The composite Business Confidence Index in Dubai stood at more than 115 points in Q3, against 100 in the previous quarter, indicating that a stronger performance is widely expected for the last quarter of 2011.The rise in confidence levels is also reflected in higher sales expected for the rest of the year.
“The Business Confidence Index is now a key metric in measuring and monitoring the pulse of business in Dubai. It enables the Department of Economic Development to gauge perceptions among the business community in Dubai and respond effectively to the requirements of doing business in Dubai,” said His Excellency Sami Al Qamzi, Director General of DED.
“The business survey helps DED to translate its constant engagement with the private sector in Dubai into tangible improvements in business policy and environment,” added Al Qamzi.
Nearly 57% of the respondents in the survey anticipated higher revenues during Q4 of 2011 while 30% sees stable sales figures. Better profits are foreseen by 44% while another 39% see Q3 profits remaining stable. Majority of the firms spoke of enhancing their procurement, indicating that the revenue boost would come from higher volumes rather than prices.
The survey also indicates that non-trade Service-oriented firms continue to be more upbeat about their future profits than those operating in manufacturing and trade. Small and medium enterprises (SMEs) and export-oriented businesses are also confident of improving their performance in Q4 and SMEs painted a brighter sales and profits picture compared to large businesses.
The services sector expressed a strong appetite for hiring in Q4 while the overall outlook for employment is seen to be stable. Almost 73% of the businesses said they will retain their employee count. In terms of capacity, companies are overall cautious about their capital investment outlook over the next twelve months, although a sizable proportion of them still plan to upgrade their technology (42%).
DED launched the quarterly survey series with the objective of preparing a snapshot of Dubai’s current economic activity and outlook of businesses in the Emirate. Led by the leading global consultancy firm Dun & Bradstreet (D&B) the survey adopts a scientific sampling approach ensuring adequate representation of small, medium, and large enterprises across the manufacturing, trading, and services sectors, while giving due attention to capturing the perceptions of the exporting firms in Dubai.
The surveys are designed to be the leading indicators of business performance across all sectors of the economy, and will help DED to report and monitor the Business Confidence Index. This Index will be a valuable tool in improving economic forecasts and policy making. DED will also use the feedback from the survey to enhance its plans for continued support for Dubai’s private sector.
For further information on the surveys, please contact Laila Buabdulla, Head of Economic Information at DED, on +971 4 4455884.
