Almost 50% of Dubai SMEs expect business conditions to improve in Q3

Almost half of the small and medium-sized enterprises (SMEs) in Dubai are optimistic that business conditions in the emirate will improve in the third quarter of the year, according to a new survey by the Dubai Chamber of Commerce and Industry.

Around 49 per cent of SME respondents said they expected business conditions to improve in Q3, compared to 25 per cent of large companies.

The survey also found that 49 per cent of SMEs anticipate business confidence to grow in Q3, compared to 38 per cent of respondents from bigger firms.

Overall, the study revealed that around 43 per cent of business leaders anticipate no change in market conditions in Q3, 39 per cent expect an improvement, and 18 per cent forecast conditions to worsen during the quarter.

Meanwhile 45 per cent of respondents said business confidence will be strengthened in Q3, 37 per cent predict no change and 18 per cent expect confidence to weaken during the quarter.

Expectations for access to financing, manpower quality, and access to facilities and infrastructure all saw quarter-on-quarter improvements in Q3, the report said.

Interestingly, the easing of visa restrictions on Indian, Chinese and Russian tourists was seen by 57 per cent of respondents as having a positive impact on overall business confidence.

Meanwhile price competition, debt collection, payment defaults, and high employment costs were cited as the key limiting factors impacting business operations, along with the high costs of capital, bank services, and raw materials.

Respondents also highlighted high commercial rents and licencing fees as key challenges for which government action is needed.

They also called for more government support on regulatory matters such as settling late payments and suggested the introduction of long-term residency visas to reduce the cost of doing business.

Hamad Buamim, president and CEO of Dubai Chamber said: “By measuring business confidence and evaluating business conditions in Dubai, the Chamber can more effectively represent the emirate’s private sector and protect its interests.

“It also helps us identify obstacles that can potentially hinder growth, as well as factors that can support the development of business in Dubai,” he added.

Also read: Dubai foresees economic growth in 2017 and 2018

A recent survey Oxford Business Group also found that the majority of UAE CEOs are feeling positive about business conditions for the coming year.

It found three quarters of participants were likely or very likely to make a significant capital investment over the coming year.

Meanwhile, 82 per cent said they had positive or very positive expectations for business conditions over the next 12 months.

Read more: Majority of UAE CEOs positive about next 12 months