Hundreds of billions of dirhams worth of government projects helped to keep Abu Dhabi business confidence buoyant in the first quarter of the year.
Government projects lift Abu Dhabi business confidence
Hundreds of billions of dirhams worth of government projects helped to keep Abu Dhabi business confidence buoyant in the first quarter of the year, according to the latest business climate survey from the Department of Economic Development.
The Business Climate General Index in the Emirate of Abu Dhabi edged up 0.1 per cent to 55 in the first three months from the final quarter of last year.
The department said the continued optimism was the result of the Government's announcement of more than Dh300 billion of projects across the emirate.
"This was the result of the concrete efforts made by the Government and the announced pumping of Dh330bn in capital projects for the period (2013-2017), in various sectors to strengthen partnership with the private sector," the report stated.
Businesses across Abu Dhabi noted some challenges too, however. Chief among them was access to capital, which is still difficult for some, and the high cost of raw materials.
"Access to capital has been limited really since the global financial crisis, because banks have been deleveraging and had very low risk appetite. We do see that changing a bit this year in line with good deposit growth in the banking sector and a broader revival in activity and confidence," said Liz Martins, a senior economist at HSBC in Dubai.
"The issue of commodity costs also chimes with our PMI survey," she added, referring to HSBC's quarterly Purchasing Managers Index survey.
The survey has for the past few years suggested companies are feeling the pain of higher prices but are unable to pass the cost along to consumers because of the generally negative economic climate.