The composite business confidence index of local companies increased by 14.9 points to 129.8 points in the third quarter of this year, from 114.9 points in the second quarter, according to the quarterly business survey released by Dubai Economy.

In a survey covering all sectors in the emirate, companies in Dubai have expressed confidence in the end of this year with improved revenues, in addition to strengthening their position, in light of the positive outlook for increased economic growth, More momentum over the coming months.

Third quarter

The composite index for the third quarter of 2019 increased by 11.3 points to 129.8 points from 118.5 points, compared with the same quarter last year, reflecting a marked improvement in the business environment and the outlook. On an annual basis, companies appear to be more optimistic about employment, depending on sales revenue and volume, with expectations of improvement in business conditions, the launch of new projects, increased marketing activities, and optimism based on the forthcoming Expo 2020 Dubai.

“When reading the data from the latest survey, there is generally a general optimism among companies across all business sectors,” said Ali Ibrahim, Deputy Director General of Dubai Economy. This optimism is often based on many of the stimulus initiatives launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and measures to boost investment and reduce the cost of doing business so that Dubai can maintain its position among the best. Investment havens. Looking ahead, there is plenty of momentum, most notably the countdown to the Expo 2020 Dubai, an event that strengthens entrepreneurs and investors' confidence in Dubai's business. ”

Sales volume

Sales volume forecasts showed an increase year-on-year and quarterly, with net balance rising from 34% for Q4 2018 and 31% for Q3 2019 to 54% for Q4 2019, thanks to expectations of improved business conditions and higher demand ahead of Expo 2020 Dubai. Accordingly, more than 55% of companies in the services and industry sectors expect to increase their sales in the next quarter, while those strong sales volume expectations have resulted in more optimistic earnings expectations.

Large companies continue to maintain stronger expectations compared to SMEs, with the composite index at 135.6 and 121.1 points, respectively. Large companies showed a higher level of optimism compared to small and medium-sized companies, on their expectations of sales prices, sales volume, employment, profits and new orders.

Wage levels

The services sector recorded higher confidence in the future of its business for a number of criteria, including wage levels, sales revenue, sales volumes, profits and employment, especially when compared to the manufacturing and trade sectors.

In the services sector, the travel and hospitality sector (hotels, restaurants, travel and car rental), the most optimistic about the volume of sales in the fourth quarter of this year, recorded a net balance of 78%, driven by optimistic expectations about the possibility of receiving more tourists and customers coming to the event Expo 2020 Dubai. On the trade front, the computer, food and beverage sectors are more optimistic about sales volume for the fourth quarter of 2019.

The manufacturing sector showed strong sales volumes, with net profit rising from 27% for the fourth quarter of last year and 25% for the third quarter of 2019, to 57% for the fourth quarter of 2019. Confidence among industrial companies improved, supported by expectations of higher seasonal demand.

The composite index of exporters showed an annual and quarterly increase of 7.2 points and 2.9 points to 118.8 points in the third quarter of 2019, compared to 111.6 points in the third quarter of 2018 and 115.9 points in the second quarter of 2019, respectively. . Delay in payment remains the main challenge, according to 43% of the companies surveyed, followed by competition 34%, insufficient demand 17%, while 13% said they did not face any obstacles in their business operations.

Trends towards employment improved year-on-year and quarterly, with net balance rising to 7% for the fourth quarter of 2018 and 12% for the third quarter of 2019, reaching 14% for the fourth quarter of the same year. This is attributed to the expected increase in employment in the manufacturing and services sectors, and there was an improvement in the trade situation from 46% for the third quarter of 2019 to 58% for the last quarter of 2019.

Business Survey

Through its quarterly business survey, Dubai's economy seeks to measure perceptions in the business community. The overall points system is calculated by weighted average scores of business indicators for small, medium and large companies, based on their contribution to Dubai's GDP. The survey is an effective tool for measuring the pulse of the business community, where public and private sector participants can track and analyze key trends and issues related to the Emirate's business world.

55% of companies in the service and industry sectors expect sales to increase in the fourth quarter of 2019.