Mideast business confidence falls
Companies reporting revenue growth fell to 49 percent compared to 55 percent six months ago, although companies reporting profit growth remain stable at 45 percent. Mindful of the need to contain costs in the quest for sustainable growth businesses identify more sales through third parties, increasing use of pay-as-you-go business services and a shorter supply chain and as the most effective cost cutting measures for the coming months.
Looking back, Middle Eastern firms identify paying for unnecessary office space (63 percent) as the main reason for corporate distress during the downturn, followed by difficult access to cost effective capital (52 percent);
Respondents identify more sales through third parties (50 percent), increasing use of pay-as-you-go business services (44 percent) and a shorter supply chain (40 percent) as the areas where companies could best make savings without damaging growth prospects.
Middle Eastern firms report that a wider distribution of customers (47 percent) and more flexible workspace (39 percent) would make the greatest contribution to enhancing future business stability as a platform for growth.
Globally, the Business Confidence Index rating is lower for small businesses (107) than for large firms (124). Joanne Bushell, VP for Middle East and Africa, Regus said, "Middle Eastern business confidence has suffered a dip possibly affected by the Eurozone crisis and a slight slowdown in BRIC growth economies. Although companies reporting profit growth remains table, there is a slight squeeze in those reporting revenues, therefore it is not surprising that in order to grasp growth opportunities in a sustainable way, businesses are still looking to cut overheads without damaging their growth prospects.
"In particular, a significant proportion of businesses believe that unnecessary office space, one of the major burdens borne through the global economic downturn alongside the well documented bank lending and capital squeeze, is an area where businesses may focus their cost-cutting efforts successfully. Respondents further confirm their outlook on flexible working practices declaring that more flexible workspace can improve business stability as a platform for future growth. With solutions readily available on the market for flexible workspace arrangements there is no doubt that the number of businesses benefiting from more nimble and scalable arrangements will increase in the coming years."