About 92 per cent of chief executives of the UAE’s largest businesses polled in a survey are confident about the country’s growth prospects, compared with 82 per cent of their global counterparts, according to a report by consultancy KPMG.
The optimism stems from the government’s handling of the Covid-19 pandemic, stimulus measures, visa reforms and Expo 2020 Dubai.
Eighty-eight per cent of local business leaders are optimistic about their company’s growth, with general optimism reaching pre-pandemic levels, according to the report, which polled chief executives of major organisations in the Emirates on their three-year outlook.
“The UAE government has turned a potential crisis into an opportunity by tackling the pandemic head-on with resources, smart technology and encouraging the private sector with a raft of enabling measures,” said Nader Haffar, chairman of KPMG Middle East and South Asia and chairman and chief executive of KPMG Lower Gulf.
“Thanks to this stable framework, chief executives are emerging stronger and more confident about the economy and their own organisations’ prospects for the future.”
Business activity in the UAE’s non-oil private sector improved to its strongest level in about two and a half years in November on the back of increased economic activity from Expo 2020, an improvement in tourism activity and increased spending.
The UAE’s IHS Markit purchasing managers’ index climbed to 55.9 in November from 55.7 in October, the highest reading since June 2019.
The rise in activity in the Arab world’s second-largest economy was underpinned by a marked acceleration in output and new business volumes, according to the index.
UAE business leaders believe inorganic strategies will be critical in driving their businesses forward over the next three years, the KPMG survey found.
Sixty-eight per cent of UAE business leaders believe inorganic strategies will be critical in driving their businesses forward over the next three years, the KPMG survey found.
About 36 per cent of chief executives said they will primarily use mergers and acquisitions to drive growth while 20 per cent said they will opt for strategic alliances with third parties and 12 per cent plan to go for joint ventures to achieve this.
Partnerships and industry collaboration will be play a key role in driving digital innovation and acquiring technology capabilities, the report said.
“To thrive in a post-Covid landscape, chief executives have to be plugged in, people-first and purpose-led to drive profitability and long-term growth, while also recognising the positive impact on the planet and society,” Mr Haffar said.
Business leaders are increasingly adopting forward-thinking strategies towards shifting their resources to disruptive technology and increasingly pushing environment, social and governance issues up the business agenda.
More than half of chief executives surveyed said they plan to invest more than 10 per cent of their revenue in becoming more sustainable, the research found.
Twenty eight per cent of business leaders in the Emirates identified disruptive technology as a perceived risk to growth while 16 per cent cited climate change and 12 per cent said operational risk and tax risk were potential impediments, according to KPMG research.
Meanwhile, only 8 per cent of UAE-based chief executives plan to downsize – or have already downsized – their physical footprint or office space because of the pandemic and changing working habits.
With people returning to places of work, business leaders are more focused on flexibility rather than wholesale changes to office-based work, according to KPMG.