Dubai firms optimistic for 2nd quarter
Businesses across Dubai remain upbeat on growth and revenues in the second quarter, with a majority of employers intending to retain their employees, according to a latest survey conducted by the Dubai Department of Economic Development, or DED.
The manufacturing sector was the most optimistic, followed by the services and trading industries, the survey revealed. The composite Business Confidence Index, or BCI, for Dubai stood at 120.5 points, indicating an optimistic outlook for the second quarter. BCI crossing 100 points is seen as indicative of a positive sentiment within the business community.
“For a businessman or investor planning his next step, it is important to know what his peers think. Particularly in a competitive business hub like Dubai, where intelligent and informed decision-making can make a big difference, it is critical to understand that thought process and its key drivers,” DED director-general Sami Al Qamzi said in a statement.
A majority of businesses in Dubai foresee sales increasing or remaining steady, and plan to retain their employee count through to the second quarter. The survey also reveals an even brighter outlook among export-related businesses, rising confidence among small and medium enterprises, or SMEs, and a stronger investment focus on upgrading technology.
“The Business Confidence Index of the DED provides a reliable source of information on the trends and expectations ruling business and investment in Dubai. All categories and sectors of business are included in the quarterly surveys to make the index a comprehensive and authentic reference,” Al Qamzi said.
Continuing the trends of the last few quarters, sales are forecast to increase in the next quarter too, driven by sales volumes. However, a few companies intend to raise their prices following the rise in the cost of raw materials across global markets. Higher sales revenues are predicted by 50 per cent of the companies while 35 per cent see no change compared to first quarter of 2012. Profit expectations are also positive, with 44 per cent of the respondents expecting an increase in the next quarter. The survey showed manufacturing as the most optimistic sector, with positive outlook extending across all key parameters, such as sales volume, selling prices, profits, employees. The service sector is close behind while trading has a comparatively lower overall outlook. In addition, exporters in Dubai were seen to have a more positive outlook on sales performance, new purchases and profits compared to non-exporters.
Even though expectations are similar on sales volumes among SMEs and their larger counterparts, large businesses are more optimistic about profits for the coming quarter. Large businesses are also relatively more positive on employment outlook.
On an overall basis, the outlook for employment continues to be stable with 74 per cent of businesses expecting no change in their head count in the second quarter of 2012. However, manufacturing and service firms plan to increase their workforce in the coming quarter.
- Oman’s Duqm tourist complex moves forward with government approval
- Kuwait fights budget deficit: Reexamining government salaries, expatriate labor
- Tunisian Confederation of Industry, Trade, and Handicrafts fights nationwide unemployment levels
- Construction costs fall in Dubai
- Western tourists flock to Iran, could generate $30B in new revenue