Confidence takes a knock among UAE executives

Business confidence is waning among senior executives at companies within the UAE, though it is still much higher in the Gulf than other regions.

Business confidence is waning among senior executives at UAE companies, although optimism is still much higher in the Gulf than in other regions of the world.

A new survey shows more than half of top-level managers in the UAE - 53 per cent - say their view of current business conditions has improved compared with where they were a year ago.

That figure dropped from 57 per cent when last measured in May, and contrasts with 69 per cent in Qatar and a full 80 per cent in Saudi Arabia who see improved conditions now.

There is still more optimism within the Gulf than other regions, according to Oliver Wyman, the management consultancy that released the biannual study.

"It is remarkable that as the rest of the world is shaking from the European crisis and the slow recovery, Gulf business leaders remain confident," said John Turner, who leads the public sector consulting practice at Wyman.

Wyman, which relied on Zogby Research Services to conduct the study, analysed responses from 160 senior managers in the UAE, Saudi Arabia and Qatar, including chief executives and financial and operating officers.

The results show more executives within the Gulf now expect business conditions to improve in the next two years compared with when they were surveyed in May last year and December 2010.

But in a note of caution, business leaders in the Emirates are also more concerned than their counterparts in Saudi Arabia as well as Qatar about the impact of outside macroeconomic shocks.

In the UAE, 74 per cent saw these kinds of issues as the biggest threat to current business conditions. That contrasts with 55 per cent of surveyed individuals in Qatar and just 46 per cent in Saudi Arabia.

A separate study released yesterday found 35 per cent of professional accountants and senior executives surveyed in the UAE were less confident about the direction business was heading in compared with three months ago. A little more than 10 per cent reported feeling "much less confident", according to the joint study conducted between the Association of Chartered Certified Accountants and the Institute of Management Accountants.

Ongoing unrest within parts of the region is another growing concern. A quarter of executives in the Emirates said political unrest within the Middle East and North Africa was the biggest threat to business conditions in the Gulf, up from 18 per cent in May, according to Wyman's survey.

Slightly more individuals - 26 per cent - cited political unrest within the Gulf itself as the largest threat.

However, this is down from 31 per cent in May, and is lower than the number of executives in Saudi Arabia and Qatar who see disruption within the Gulf as the greatest cause for concern.