Businesses in the Gulf are more optimistic about growth in the year ahead than almost any other global region, a survey has found.
Three-quarters of businesses in the region expect turnover growth over the next 12 months, with the proportion expecting gross profits growth to rise as well, according to the annual Institute of Chartered Accountants in England and Wales (ICAEW) global enterprise survey.
"There have been several challenges for Gulf businesses over the past couple of years. However, some of these are now retrenching and optimism is high," said Amanda Line, the regional director for ICAEW Middle East.
Globally, only African businesses showed more optimism about the future, the survey found. Both Europe and the US businesses remain sidetracked by the twin concerns of fiscal troubles and slowing growth. The slowdown in the West has also hit the optimism of Asian businesses, many of which export to those markets.
The survey results add to existing signs businesses in the region expect to ride out challenges posed by a rocky global backdrop and the effect of the Arab unrest.
Businesses in Dubai expect a stronger performance in the fourth quarter of the year compared with the previous quarter, a survey by the Dubai Department of Economic Development published on Saturday showed.
New business and employment growth in the UAE accelerated to its highest level in four months last month, according to HSBC's purchasing managers' index.
ICAEW's survey shows Gulf businesses are positive about reaching new markets and customers including expansion into new markets, for some. In the UAE, growth is driven by optimism for domestic sales. A total of 56 per cent of businesses surveyed expect domestic sales growth in the next 12 months, compared with 38 per cent reporting expansion in the past 12 months.
Of those businesses currently exporting in the UAE, 70 per cent expect to see export growth in the next year. Two in three reported export growth over the past year.
Among Gulf non-exporters, more than half have plans to start over the next couple of years. As many as one in three businesses have definite plans to export, higher than in other regions.
The headache of late payment by customers for business deals also seems to be easing. In the UAE, 13 per cent of respondents felt this would become a bigger challenge in the year ahead, down from 32 per cent in last year's survey. About one in 10 Gulf businesses said global trade had been disrupted by regional unrest. Firms in the UK and Europe, however, were more likely to be affected by the instability.