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Gulf business confidence drops, led by UAE, Bahrain

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Tuesday, 01 July 2008

Business confidence is falling across the GCC with Bahrain and the United Arab Emirates the most pessimistic in the six-nation group, according to the Arabian Business Business Confidence survey.

The survey, which recorded the opinions of over 500 business people from across the GCC over a four week period, asked respondents if they expected overall economic conditions in six months to be better, the same or worse than they were presently.

The survey found only two countries with a greater percentage of business people predicting deteriorating economic conditions over improving conditions - the United Arab Emirates and Bahrain.

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In total 26.3 percent of business people polled in the UAE believed economic conditions would improve over the next six months, while 30.4 percent said they saw economic conditions weakening.

In Bahrain 28 percent of respondents said they saw economic conditions improving, versus 32 percent who said they expected the business environment to become more difficult.

Inflation in the UAE hit 11.1 percent in 2007, its highest level in 20 years. In Bahrain, which unlike the UAE publishes monthly statistics, inflation accelerated to 6.2 percent in April, compared with 5.24 percent in March, on rising food, drink and tobacco costs.

More worrying for the region as a whole is that overall business sentiment is deteriorating.

Data collected in the second half of June revealed a growing number of business people believing the economic environment would worsen.

Around 35.5 percent of respondents who completed the survey in the second half of the month said it would be harder to do business in six months time, up from 22 percent in the first two weeks.

The most optimistic nations in the GCC according to the Business Confidence survey were Saudi Arabia and Oman.

Over 70 percent of Oman-based respondents predicted improving economic conditions, while in Saudi Arabia over 51 percent of the business people polled predicted a better business environment in six months.

The Arabian Business Business Confidence Survey correlates with the findings of Maktoob Research's study of how happy people are in the GCC, suggesting business confidence contributes to a sense of well being.

According to Maktoob's survey, Omanis and Saudis are the happiest people in the GCC. In total 61 percent of Omanis said they were happy, with Saudi scoring 57 percent, Qatar 56 percent, Bahrain 54 percent, Kuwait 53 percent and the UAE 52 percent.

The Arabian Business survey also asked respondents to measure their company's level of business confidence by giving a score of between one and 10 (with one being the lowest level of confidence).

The findings across countries was markedly uniform with an average score of 6.56. That fell through the month with the average falling to 6.47 for the last two weeks of June.

Kuwait-based business people were the most optimistic about their companies, with highest percentage of respondents clustered around the nine mark.

In the rest of the GCC, the highest cluster was around an eight. The Arabian Business Business Confidence index will track how this changes over time.

There was also little variation when it came to the size of companies. The most pessimistic over the future of the economy were the largest companies - those with over 1000 employees - where 29.9 percent of respondents predicted worsening economic conditions.

Companies with between 501 and 1000 employees were the most optimistic - with 50 percent of respondents predicting improving economic conditions.

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READERS' COMMENTS

Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
Confidence is Perception of Good Authentic Leadership
Posted by Philbert Suresh, Academic Professional, TLC Chennai Project Office, India on Tuesday 1 December 2009 at 07:01 UAE time


Confidence is essentail ingredient to jump start the economy and includes both business and consumers at every level. God to make a better tomorrow and av oid the neaftive soothsayers and prophets of doom and gloom in our community.

i-FUN
Intelligent Friends in the University Network
Recession in Dubai
Posted by Babu Haji, Bombay, India on Monday 21 September 2009 at 23:06 UAE time


I agree with SV but he has written only half the story. Having lived in Dubai for nine years until this April, I am among those who closely observed, experienced, benifitted and finally suffered with Dubai's expansion. The current crises was long overdue. The reasons range from too much expansion in too little time, overnight changes in the laws by the goverments and absence of any strong judicial legal system, specially the labour laws. Currently thousands of construction works are unpaid for several months, 20% of housing units are vacant (and the nos. are rising) and the expatriates who make 75% of the population are leaving the country in droves. What next?
Confidence in Dubai and the UAE
Posted by SV, London, UK on Friday 26 June 2009 at 14:30 UAE time


Lets get some perspective on this. I am in the UK and read the stories in the British press about the miracle of Dubai's growth thats going sour. The stories are as salacious as they were when lauding Dubai's growth. I spent many years travelling to the ME on business and Dubai in particular and saw the rapid expansion first hand, so its sad to see the recessions effects now. However, Dubai, the UAE and the ME are not alone in their suffering. Personally, I think Sheikh Mohammed is a remarkable ruler who's foresight has created an amazing business hub in a relatively oil poor state compared with others in the region and I would rather back him to find a way out of the decline sooner than virtually any of the western leaders. In fact, despite the stories of doom and gloom, I would readily move TO Dubai if the right opportunity arose as I believe Dubai will re-emerge stronger and quicker than many other economies. As for the British press, its not atypical to indulge in some "schadenfreud", just as they are keen to marvel at success a little too much. A kinder interpretation would be that Dubai acts as a barometer - its growth was spectacular and so its downturn all the more relevant as a reflection on the current GLOBAL recession. Ultimately you have to think: if someone has a record of creating such a significant world business hub out of the desert, would you want him on your side in the current crisis, or are you happier to have Brown, Darling or Cameron & Co, Sarkozy etc etc.!?
confidence in business down
Posted by Boston, Dubai, UAE on Wednesday 28 January 2009 at 21:27 UAE time


I totally agree with ND,state owned companies and govt bodies should lead by example and not delay payments. This sends a wrong message and brings down the morale of business owners.
Govt. authorities should intervene and not just present rosy pictures.

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