Seventy-nine per cent of small and medium businesses in the UAE are now open for business, up from 65 per cent in May, as movement restrictions imposed in the wake of the Covid-19 pandemic are eased and the economy recovers, according to a new report.
However, SMBs around the world continue to face an environment of "economic uncertainty", according to the Global State of Small Business Report by Facebook, the World Bank and the Organisation for Economic Co-operation and Development.
“The economic recovery will likely take time … SMBs are potentially vulnerable to a prolonged economic downturn,” the report said.
The global economy is facing its deepest recession since the Great Depression, with the World Bank estimating a 5.2 per cent contraction in global gross domestic product for 2020 due to the economic fallout from the pandemic.
In the UAE, about four in 10 SMBs said they had reduced the number of employees.
Almost 47 per cent of consider cash flow as a key ongoing challenge and 42 per cent cite a lack of financial assistance as a major hurdle.
“Despite showing an incredible amount of resilience and creativity during the pandemic, small businesses still face major challenges … for many, cash flow is among their biggest difficulties,” said Ramez Shehadi, managing director of Facebook for Middle East and North Africa.
“Direct financial support can make a difference in helping many of them pay their employees and keep their doors open for business,” he added.
The report, which surveyed more than 25,000 SMB owners, managers and employees in over 50 countries in the last week of June, defined SMBs as those with 500 or fewer employees. SMBs tend to differ from SMEs by employment, with the former often relying on part-time workers or outsourced staff and the latter employing full-time workers.
Facebook is also offering Dh2 million in cash grants and credits to Dubai SMEs as part of a $100m pledge announced in March to help 30,000 SMBs in over 30 countries.
Globally, the sectors most affected by movement restrictions in the early months are the ones reopening the fastest, the report found.
For example, in the hospitality sector, the number of hotels, cafes and restaurants closed across the world fell to 19 per cent, from 32 per cent in May.
Within the services sector, consumer-facing sectors have also been quickly reopening.
Closure rates for travel and tourism businesses fell to 31 per cent, from 55 per cent previously and education and childcare business closures dropped to 31 per cent, from 44 per cent.
Dubai SMEs can check to see whether they are eligible for Facebook grants or ad credits by clicking here.