UAE - Mubasher: The Composite Business Confidence Index (BCI) in the emirate of Dubai increased by 2.2 points in the second quarter of 2019, reaching 114.9 from 112.7 points in Q2-18, with respondents projecting higher volumes and profits.
The economic activity in the emirate, mainly in the trading and construction sectors, and businesses, improved in Q2-19 on the back of new export markets and projects ahead of Expo 2020, according to the quarterly survey conducted by Dubai’s Department of Economic Development (DED).
During the three-month period ended 30 June 2019, 83% of the businesses in Dubai rated their state as 'good' or 'stable', the survey showed.
On the other hand, other businesses reported a few obstacles such as fragile demand during the holy month of Ramadan and growing competition.
As for the proportion of businesses anticipating an improvement in the business situation, it rose marginally to 46% for the third quarter of 2019 from 45% for Q3-18, with 43% of businesses predicting stability to prevail.
The survey also indicated that large companies would maintain solid projections as compared to small-and-medium sized enterprises (SMEs) with Composite BCI scores of 118.3 and 109.9 points for Q3-19, respectively.
As Dubai successfully promotes itself as, 22% of the firms look to exporting to new markets during Q3, 2019.
Moreover, 22% of the firms eye exporting to new markets during Q3-19 in line with the emirate’s position as a competitive source market, the survey noted, pointing out that “the leading new markets for export diversification are Africa and Europe”.
Khalid Al Kassim, assistant director general for economic affairs in Dubai Economy, commented: "Businesses in Dubai have been able to remain competitive and aim for the next level as a series of measures adopted by the government continue to enhance ease of business and create new economic opportunities."
In the same vein, 50% of the firms plan to boost their revenues in Q3-19, while 33% estimated stable revenues, the survey revealed.
Businesses’ volumes are likely to improve in the three-month period to end 30 September 2019 as compared to the year-ago period, with the net balance expected to increase to 31% from 29% for Q3-18.
The survey also found out that 79% of respondents aim to maintain their selling prices at the current level for the upcoming quarter, with 10% of the firms looking to raise prices.
“Hiring intentions have softened on a quarterly basis with the net balance decreasing from 13% for Q2-2019 to 12% for Q3-2019,” the survey highlighted.
In terms of service volumes, the construction segment is the most optimistic for Q3-19 with a net balance of 41% based on increasing in new projects and expected improvement in market conditions
“Exporters are more optimistic than the overall business community, with Composite BCI scores of 115.9 and 114.9 points, respectively,” according to the survey.
Large companies have reported a more optimistic outlook than SMEs in terms of projected selling prices, wage levels, volumes, hiring, and new purchase orders, while SMEs have predicated a slightly better outlook for revenue and profits.
The survey showed that 30% of the businesses plan to expand their current headquarters in the coming 12 months.
