Dubai: Sales expectations of traders up for 2008
As part of its efforts to provide market information to support business decisions, the Dubai Chamber of Commerce and Industry (Dubai Chamber) conducts an annual survey of traders to get their expectations for the new year. Such expectations, being of the market players themselves, have been shown to be reliable advanced indicators of the market.
The Dubai Traders Outlook Survey 2008 asked respondents for their sales expectations for the year compared to the sales during the previous year. Responses provided by 441 representative samples showed an increasing expectations for higher sales since 2006, when expectations declined as the nation mourned the death of two of its leaders, Sheikh Zayed and Sheikh Maktoum.
Expectation for higher sales was highest in 2005, with 60% of traders expecting higher sales than in 2004. Corresponding expectations taken in the beginning of 2006, however, showed that majority expected only the same level or even lower sales than in the previous year. In fact, the relative size of traders with negative sales expectation rose to 19%.
Signs of improvements were recorded in 2007, when the percentage of traders with higher sales expectation rose to 54%, and with the percentage expecting the same level of sales as in 2006 remaining at 32%, the relative size of those with negative expectation declined to only 14%. Data from the 2008 survey round showed continuing improvements in the outlook of traders. The relative size of traders with positive sales expectation for the year rose to 57%, while traders expecting no change slightly declined to 30%; and traders with negative expectation, to 13%.
Traders of industry inputs and machinery are most optimistic
The market for goods responds to the changes in the socio-demographic and economic characteristics of the area. The growth of the industrial sector of Dubai has fueled the increasing optimism of traders of industry inputs and of machinery. While 74% of traders of industry inputs expected higher sales in 2008, 70% of traders of machinery had similar expectation. These figures were comparable to their respective 2005 expectations.
The general traders had been the most optimistic group in 2005, but they were the second most pessimistic group the year after, with only 44 percent expecting higher sales. For 2007 and 2008, however, the group has regained their optimism as more than 60% of them expected higher sales for the year. On the other hand, a growing optimism could be discerned among traders of household goods. This observation signals a changing structure of the population towards greater increase in the number of families, exerting greater demand for household goods. Percentage of traders of these goods rose from 48% in 2005 to 57% in 2008.
The growing population failed to positively affect the sales expectations of traders of consumer goods. In terms of number, the market for consumer goods is dominated by micro establishments, organized and operated in the traditional manner. However, in terms of market share, the large chains of hypermarkets are the dominant players. Thus, as the latter become more and more aggressive in their marketing strategies, the small traders become less optimistic of their market, as shown in the relative number of traders with higher sales expectations dropping from 67% in 2005 to 49% in 2008. Declining expectation for sales of consumer goods is also an expected impact of rising inflation.
Traders of textiles and garments are many and mostly small. Over the years, they had always shown relatively lower sales expectations, as the competition had been relatively high. Thus the relatively number of those with positive sales expectation remained below the majority during the surveyed years.
The relatively declining optimism of traders of vehicles was unexpected, given the rising population and the rising per capita income of Dubai population. The group, however, included the traders of spare parts and accessories, which are generally small.
Results of the survey showed that although overall expectation for higher sales was up, there remained subsectors, especially those dominated by small traders, where expectations were low. This represents a renewed call for a program for SMEs designed to make them more competitive.
- Dubai Chamber seminar highlights trader expectations for 2008
- Up to 30 per cent increase in sales expected during DSS 2008 says Salem Al Ghurair
- Better than expected visitors attendance and sales mark the conclusion of Dubai international Jewellery week 2008
- Villa sales prices up 23% - apartment sales prices up 14% in 2012, says latest Asteco report on Dubai real estate