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Dubai business mood surges in Q3
Dubai’s business confidence surged in the third quarter of this year as businessmen flock back to the emirate and the domestic economy is back on track, fueled by growth in many non-oil sectors.
The business confidence index (BCI), a quarter survey of local businessmen conducted by the global business information firm Dun and Bradstreet, soared to 115 points in the third quarter from 100 points in the second quarter.
The survey was conducted for Dubai Department of Economic Development (DED) and it covered nearly 500 local companies involved in many sectors, including small and medium firms.
The surveys showed 57 per cent of respondents said they expected to realize high profits in the fourth quarter while 30 per cent expected stable sales.
Around 44 per cent said they were making higher earnings in the third quarter and 39 per cent expected stable revenue.
According to the report, most firms said the increase in their revenue was a result of higher sales not because of a rise in prices.
The survey showed services companies were the most optimistic about the prospects of their revenue while small and medium firms involved in export expected better performance in the fourth quarter.
Services companies said they also expect to hire new staff in the fourth quarter while 73 per cent of the total respondents said they would retain current work force. Business firms in general expressed reservations regarding new investments in the fourth quarter but 42 per cent of the surveyed companies said they have plans to upgrade their technical capabilities.
“The business confidence index is a true reflection of economic activity in Dubai and is a major factor in measuring business mood in the emirate,” said Sami Al Qamzi, director general of DED. “The index helps DED in making economic forecasts and responding to business requirements in the emirate.”
Dubai is the second largest UAE emirate after Abu Dhabi and the region’s commercial hub, handling over a fifth of the Gulf’s non-oil trade.
Like other parts of the world, Dubai was hit by the 2008 global fiscal distress, with its GDP falling by around 4.5 per cent in 2009 and the emirate suffering from accumulating debt. But GDP rebounded into positive growth of around 1.7 per cent in 2010 and is projected to swell by more than three per cent this year, according to the IMF and the Institute for International Finance (IIF).
In its latest Arab report released this month, the Washington-based IIF said the GDP of the UAE, including those of Dubai and Abu Dhabi, registered a “significant”
“The solid growth in Dubai’s core activities of trade, retail sales, and tourism will more than offset the continued retrenchment in the construction and real estate sectors, resulting in growth of 3.1 per cent,” IIF said.
In recent comments, a Dubai official said he expected the emirate’s GDP to expand by between three and five per cent this year on the back of stronger performance in the tourism, trade and other sectors.
Abdul Rahman Al Ghurair, chairman of the Dubai Chamber of Commerce and Industry, also said a sharp downturn in the emirate’s property sector following the 2008 global fiscal distress depressed inflation and spurred a capital inflow.
“With the positive growth rate recorded in 2010 and the excellent investment climate in Dubai, as well as the positive forecasts of investors, the emirate is expected to record real GDP growth of 3-5 per cent this year,” he said.
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