Nearly 60 per cent of Dubai firms expect higher economic growth in the first quarter of 2019 as government measures introduced last year bear fruit, according to a survey by the emirate’s Department of Economic Development.
The number of firms optimistic about the first quarter of this year is higher than 41 per cent of those polled about prospects for last year’s first quarter in a previous survey, the department said on Sunday. About 34 percent expect stable growth and 6 per cent foresee a decline in economic activity.
“Sustained public spending on infrastructure and social development, initiatives to increase ease of business, and a brighter outlook on sales and profits have all contributed to businesses in Dubai welcoming the New Year with improved confidence,” said the department. “Large companies and the manufacturing sector as a whole foresee seasonal tourist footfall and the Expo 2020 as well as varied projects aimed to accelerate innovation, industry and exports as part of the Dubai Plan 2021, driving demand during Q1 2019.”
The UAE has been introducing a series of measures to boost growth this year, including lowering the cost of doing business, offering long-term visas to certain individuals and allowing foreign ownership of selected businesses outside free zones.
These measures as well as increased private sector credit and higher inward investment are expected to help boost economic growth to 3.7 per cent in 2019 and 2020 up from a projected 2.9 per cent in 2018, the International Monetary Fund said earlier this month.
The manufacturing sector is optimistic regarding revenues, volumes, hiring, profit and new purchase orders. Around 42 per cent of manufacturing firms are undertaking technology upgrades compared to 35 per cent of service firms and 27 per cent of trading firms.
“The services sector is most optimistic about selling prices and within the sector, the hospitality segment which includes services related to travel and car rentals, is most optimistic about higher volumes for Q1 2019,” the department said. “In the trading sector, the computers and electronics segment is most optimistic about volumes during Q1 2019, supported by increased demand from new and existing customers."
Overall, large companies were more optimistic than small and medium sized enterprises.
Some 46 per cent said the main challenge for them is competition, followed by delays in payments and receivables, and demand and market conditions.
