Survey: Dubai business confidence up 14.9 points to 129.8 in Q3 2019
Businesses are upbeat about hiring, revenues, and volumes, on account of expected improvement in business conditions
The composite Business Confidence Index (BCI) of Dubai’s local businesses increased to 129.8 points in Q3 2019, 14.9 points higher than the previous quarter, demonstrating improved confidence in the business environment with stronger revenues and economic growth expected in the months ahead, according to Dubai Economy’s quarterly business survey.
The composite BCI for Q3 2019 is also 11.3 points higher than Q3 2018, reflecting that businesses are more upbeat about hiring, sales revenue, and volumes, on account of an expected improvement in business conditions, new projects, increased marketing activity, and optimism surrounding the upcoming Expo 2020.
Commenting on the results of the survey, deputy director general of Dubai Economy, Ali Ibrahim, said: “The measures initiated under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to reduce cost of doing business and strengthen Dubai as one of the best investment destinations have contributed to the increasing optimism.”
Ibrahim added: “Looking ahead, we see the momentum building up, notably with the countdown to Expo 2020 Dubai, which will further strengthen investor confidence in Dubai.”
The survey’s year-on-year projection for volumes has also increased, with net balance increasing from 34% in Q4 2018 to 54% for Q4 2019. As such, more than 55% of firms in both services and manufacturing sectors expect an increase in volumes and profits in the coming quarter, the Dubai Economy report stated.
Large companies continue to maintain stronger projections as compared to SMEs with Composite BCI scores of 135.6 and 121.1 points, respectively.
The services sector is more confident about its business prospects for parameters such as wage levels, sales revenue, volumes, profits, and hiring as compared to manufacturing and trading sectors.
The manufacturing sector has displayed a stronger forecast for volumes with net balance increasing from 27% in Q4 2018 to 57% for Q4 2019. Sentiments within manufacturing firms have improved, supported by expectations of rising seasonal demand.
Delay in payments remains the primary challenge, as cited by 43% of firms, followed by competition (34%) and insufficient demand (17%).