Business confidence in Dubai’s private sector is on the rise, owing to an improvement in the emirate’s market conditions, according to two major survey findings.
A Department of Economic Development (DED) business confidence survey found that 83 per cent of businesses in Dubai expect an increase or no change in sales volumes in the third quarter of 2013, while many plan to invest in hiring staff or technology upgrades.
Meanwhile another quarterly survey by Dubai Chamber of Commerce and Industry found that 48 per cent of business leaders expected economic conditions to improve in the upcoming quarter. The optimism among business leaders was attributed to increased employment and improved access to credit and financing facilities.
Some of the key challenges identified by the respondents in both surveys included increased competition and availability of skilled labour in the market.
Both surveys show that the optimism among private sector leaders has stabilised jobs. Around 16 per cent of DED survey respondents said that they will be increasing headcount as compared to 11 per cent in 2012 while the BCI study also showed a positive outlook on employment.
“As per current estimates, Dubai’s real GDP grew by 4.1 per cent in the first quarter of 2013, followed by 4.7 per cent in Q2 as trade and other non-oil sectors flourished and the prevailing trends confirm that such growth is here to stay,” commented Sami Al Qamzi, director general of DED.
The overall business outlook for Q3 remains steady with the manufacturing sector being more optimistic about profits while the service sector was positive about hiring, according to the DED survey.
Sector-wise comparisons of sales volume expectations show that 47 per cent of manufacturing firms, 45 per cent of trading firms and 43 per cent of services were upbeat on Q3 2013, said DED survey.
Real estate and ICT firms have a higher volume of projected sales within the service sector owing to strengthening market conditions driving expectations on new projects and contracts. Around 45 per cent of transport companies also expect more projects in the next quarter.
The DED survey also revealed that companies are more growth oriented with 74 per cent of the respondents saying that they would invest in expansion as compared to 30 per cent in 2012.
A quarter-on-quarter comparison of the BCI survey shows that sentiments for Q4 are also upbeat as business leaders are banking on Dubai’s potential for business and leisure tourism.
However, amidst rising business confidence, business leaders called on the government to address the rising costs of operation and the two-year visa validity rule that negatively impacts business in the region.
Those surveyed by the Dubai Chamber also called for government intervention in formulating clear rental increase policies that rely on economic indicators and market information.