Confidence slips back as businesses think of efficient growth initiatives

Press release
Published April 9th, 2012 - 12:26 GMT

Middle East business confidence has slipped back 9 Index points to 125 since September, according to the global Regus Business Confidence Index. Companies reporting revenue growth fell to 49% compared to 55% six months ago, although companies reporting profit growth remain stable at 45%. 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% as the main reason for corporate distress during the downturn, followed by difficult access to cost effective capital 52%;

Respondents identify more sales through third parties 50%, increasing use of pay-as-you-go business services 44% and a shorter supply chain 40% as the areas where companies could best make savings without damaging growth prospects;

Middle Eastern firms report that a wider distribution of customers 47% and more flexible workspace 39% 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 notes: “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.”

Background Information

Regus

Regus is the world’s largest provider of flexible workspace solutions, with customers including some of the most successful entrepreneurs, individuals and multi-billion dollar corporations.

Our network includes almost 3000 business centres, spanning almost 900 cities across 120 countries.Through our range of office formats, as well as our growing mobile, virtual office, and workplace recovery businesses, we enable people and businesses to work where they want, when they want, how they want, and at a range of price points.

Founded in Brussels, Belgium, in 1989, Regus is based in Luxembourg and listed on the London Stock Exchange

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