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Dubai businesses bullish on fourth quarter: DED
posted on 27/11/2011: 57 views
Dubai businesses expect a stronger last quarter of 2011 and they have already beaten the global trend in earlier quarters of the year with positive profit and revenue growth, as well as confidence levels to match.
The business community in the emirate expressed increasing optimism about business activity in the fourth quarter of the year, according to the findings of the most recent quarterly survey conducted by the Department of Economic Development, or DED.
A representative sample of 500 companies, including small and medium enterprises, or SMEs, and export-oriented businesses were surveyed in order to gauge perceptions and future outlook among entrepreneurs and investors in Dubai.
The composite Business Confidence Index in Dubai stood at more than 115 points in the third quarter, against 100 in the previous quarter, indicating that a stronger performance is widely expected for the last quarter of 2011. The rise in confidence levels is also reflected in higher sales expected for the rest of the year.
Nearly 57 per cent of the respondents in the survey anticipated higher revenues during the fourth quarter of 2011 while 30 per cent sees stable sales figures. Better profits are foreseen by 44 per cent while another 39 per cent see third quarter profits remaining stable. Majority of the firms spoke of enhancing their procurement, indicating that the revenue boost would come from higher volumes rather than prices.
"The Business Confidence Index is now a key metric in measuring and monitoring the pulse of business in Dubai. It enables... to gauge perceptions among the business community in Dubai and respond effectively to the requirements of doing business in Dubai,” DED director-general Sami Al Qamzi said.
Despite an uncertain situation of global market companies reporting good business, growing revenues and stable result, according to a business consultant. "Business confidence is dim, however some companies are still doing well, their revenues are going up, may be marginally but they are showing stable result,” Jitendra Gianchandani, chairman and managing partner of Jitendra Consulting Group, told Khaleej Times.
The survey also indicates that non-trade service-oriented firms continue to be more upbeat about their future profits than those operating in manufacturing and trade. SMEs and export-oriented businesses are also confident of improving their performance in fourth quarter and SMEs painted a brighter sales and profits picture compared to large businesses. Gitex Shopper, this year, reported stronger than ever sales at the consumer electronic event that recorded 10 per cent in sales to Dh193 million during an eight-day shopping event.
Despite external pressures from the worsening European debt crisis and a weakening American economy, Dubai's outlook remains positive, according to a top official of Dubai Chamber. Over the past few months, Dubai has launched a series of measures to improve its business environment. These include a new legislation to regulate economic activities in order to ensure a more conducive environment for doing business and attracting investments. Dubai's economy is on track to reach its forecast growth of between three to five per cent, driven by trade and services sectors, specifically, tourism, aviation and retail, Dubai Chamber director-general Hamad Buamim said recently.
The UAE has one of the highest levels of consumer confidence globally as the country is among the top 10 nations in the world in terms of consumer confidence, according to a latest survey findings from Nielsen — a leading global provider of insights and analytics into what consumers watch and buy.
The HSBC UAE Purchasing Managers' Index jumped to the highest level in four months in October as new business and employment growth accelerated and companies increased output in the country.
Arab Spring movement across the Middle East has played to the UAE's advantage with regional companies choosing to relocate their core business functions or headquarters to the emirates where they have greater confidence in the economic and political future of the country, according to Links Group. In the first three quarters of 2011, Links Group recorded a 75 per cent increase in onshore business licence issuance in Dubai and Abu Dhabi compared to the same period last year. – Khaleej Times
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