The view has been supported by the fact that the number of respondents reporting an increase in total orders received in the final quarter decreased to 49 per cent, while the number of respondents stating that total orders have stagnated or declined increased to 51 per cent.
Of all respondents, about 62 per cent saw sales increasing in the first quarter of 2016, while 38 per cent anticipated sales to either remain the same or decline.
The trend of worsening payment collections continued in Q4 with 29 per cent of respondents seeing a continuing deterioration and 47 per cent reporting their ability to collect payments as unchanged from the previous quarter.
The current situation is a sharp contrast to the first half of last year, when 69 per cent and 72 per cent of respondents in Q1 and Q2 respectively reported an improvement in payment collections.
Similarly, companies’ ability to raise finance has also worsened with 36 per cent of respondents reporting a decline, and 38 per cent maintaining that their ability to access growth capital is unchanged.
In combination, difficulties with regards to payment collections and tightening credit are likely to put more pressure on the financial situation of small businesses.
Despite indications suggesting that 2016 will be a challenging year for SMEs, the overall sentiment among small businesses remains cautiously optimistic with 50 per cent of respondents saying that they are feeling slightly positive, while 25 per cent remain neutral and 12 per cent are negative, said the report.
Only eight per cent stated that they have a very positive outlook and four per cent were unsure, it said.
“The fundamentals of the UAE market remain strong and there is opportunity for growth, despite the current prevailing negative sentiment among business owners,” said Hunt.
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“Going forward it will become increasingly important for SME’s to be flexible and adapt to the changing market environment, and to maintain an open dialogue with financiers,” he added.
