Regional businesses are in expansion mode despite an economic slowdown, says a new survey.
A poll of nearly 200 company chief executives across the Middle East found that more than half of those questioned are likely to expand their businesses over the coming year.
The poll from Oxford Business Group (OBG) and Saudi Hollandi Bank found that 52 per cent of business leaders said they were “likely or very likely” to make a sizeable capital investment in the coming year.
The news comes amid a darkening outlook for economies in the GCC, which have been hit by a slump in global oil prices since 2014 coupled with a slowdown in global growth, forcing governments in the region to cut back spending and precipitating project delays and job losses.
According to the most recent PMI data, growth in the non-oil sectors of the UAE and Saudi Arabia dipped again last month as a slowdown in global growth put pressure on domestic businesses.
The UAE index registered a much slower increase in the amount of new work reported than it had for the past six Septembers in the country and the level of job creation was also more modest than usual for the time of year.
Yet according to the OBG survey, 57 per cent of business leaders surveyed estimated that government spending drives less than 40 per cent of business in their respective sectors.
And despite reports that banks in the region are becoming less willing to lend to businesses and individuals amid uncertainty about future economic growth, nearly half of all respondents said they found gaining access to credit “easy or very easy”.
The survey is just the latest in a series of fairly upbeat business polls in the region. Last month, a survey of 2001 employers in the Mena region by Bayt.com and YouGov found that 67 per cent of those questioned said they were looking to hire over the next year.
“Despite global media reports that the region is in a period of economic turmoil, our GCC CEO survey results point to a wholly more positive outlook, with sentiment across the sectors far from weak,” said Oliver Cornock, OBG’s regional managing editor.
“Of course, there are significant challenges. However, what can be deduced from the results is that the region’s corporates remain broadly positive and are positioning themselves to be able to compete when stronger growth returns.”
lbarnard@thenational.ae
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