Business confidence and conditions in Dubai are forecast to strengthen in the third quarter, with small and mediums-sized companies expressing more optimism than large corporations, according a survey from the Dubai Chamber of Commerce and Industry.
The growing confidence comes "in line with an increase in the number of new companies" expected to join the chamber in the third quarter, which is an indicator of business activity in the emirate, said Hamad Buamim, President and chief executive of Dubai Chamber.
Forty-five per cent of respondents expect confidence to improve in the third quarter, while 39 per cent predict conditions will pick up, according to the Business Leaders’ Outlook Survey. In the previous survey, 38 per cent of respondents expected to see business conditions improve in the second quarter and 36 per cent of business leaders expected business confidence to strengthen.
Around 49 per cent of SMEs expected business conditions and confidence will improve, compared to 25 per cent of large companies saying conditions will improve, and 38 per cent of large corporations saying confidence will increase.
Expectations for access to financing, manpower quality, and access to facilities and infrastructure improved quarter-on-quarter. Fifty-seven per cent of respondents said the easing of visa restrictions on Indian, Chinese and Russian tourists will have a positive impact on overall business confidence.
“By measuring business confidence and evaluating business conditions in Dubai, the Chamber can more effectively represent the emirate’s private sector and protect its interests,” said Hamad Buamim, President and chief executive of Dubai Chamber. “It also helps us identify obstacles that can potentially hinder growth, as well as factors that can support the development of business in Dubai.”
Respondents also identified hindrances to business confidence and conditions, including price competition, debt collection, payment defaults, high employment costs, and high costs of capital, bank services, and raw materials.
They also said high commercial rents and licensing fees are challenges that needed government action.
“They also called for more government support on regulatory matters such as settling late payments, while they also suggested the introduction of long-term residency visas to reduce the cost of doing business,” the chamber said.
The improvements in the overall business conditions in Dubai’s non-oil private sector gathered steam last month, with the seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – registering at 56.5, up from May’s seven-month low of 55.
Notably, the latest reading was above the long-run series average (55.2).