Dubai Companies Expect Accelerated Economic Growth in Q1
A recent survey conducted by the Department of Economic Development (DED), shows that many Dubai-based companies are optimistic about growth in Q1 2019. This shows a huge improvement over the outcome of the same survey last year.
While the 2019 survey indicated that 59 percent of companies are expecting the economy to grow this year, in Q1 2018, 41 percent of respondents for the same survey expressed their optimism that the economy will grow and it did grow by 2.8 percent.
The survey further showed that 34 percent of respondents expect stability, while 7 percent expects the economy to witness a decline, a 1 percent decrease from the percentage of firms that expected a decline last year.
DED also stated that the composite Business Confidence Index (BCI) increased year-on-year and quarter-on-quarter in 2018, driven by expectations of increased new purchase orders, volumes, revenues, and profits.
In the same vein, revenue projections are also expected to increase, with the net balance slated to go up from 26 percent in Q1 2018 to 52 percent for Q1 2019. Also, the net balance for volumes is expected to increase from 34 percent for Q4 2018 to 47 percent for Q1 2019.
Why Is This Survey Important For Foreign Investors?
This high level of optimism is in part driven by the government's continued increase on infrastructure and social developments spendings, as well as efforts by the government to sustain investor confidence in doing business in the emirate. In the past few months, the government has rolled out multiple policies geared towards accelerating foreign investment and encouraging existing SMEs.
The EXPO 2020 is another factor influencing the views of many business owners as they believe that the expected influx of people and capital will result in business growth and improvement in the entire economy.
Aspects that Government Should Look Into
According to respondents, competition, delay in payments and receivables, and demand and market conditions are the three primary challenges faced by companies in Dubai.
However, many entrepreneurs and business owners do not expect any of the negative factors to hinder their business operations.
In addition, the government of Dubai recently announced plans to expedite payment to small businesses in order to increase liquidity in the economy.
Despite the global economic downturn and decline in business confidence, Dubai is showing signs of growth as the UAE government continues to position the country to attract global investors. With the EXPO 2020 around the corner and the government rolling out policies to support SMEs, it is undoubtedly the right time for entrepreneurs and investors to go forward. If you are one among them and is considering starting a new business in Dubai, contact us for more information on the same.