Business confidence in Dubai boosted by expo effect
Business confidence in Dubai is at its third highest level in 10 years, according to the latest survey from Dubai Chamber, as companies in the emirate begin to feel the positive impact of the World Expo.
According to the findings of the Chamber’s quarterly Business Leaders’ Outlook Survey, 76 percent of respondents noted improved business confidence in the fourth quarter of 2021, compared to 66 percent in the third quarter and 48 percent in the second.
Hamad Buamim, president and CEO, Dubai Chamber, told Arabian Business: "Over the last year, economic growth in the emirate has become more sustainable while business confidence has improved due to the positive impact of new regulation and business incentives and other major initiatives introduced by the government."
Around 78 percent of survey respondents said they expect Expo 2020 Dubai to benefit their businesses in the coming months. In addition, 83 percent of business leaders expected an improvement in business conditions in Q4-2021 compared to 66 percent in the previous quarter and 51 percent in Q2.
Expo 2020 Dubai opened its doors to the world at the start of October, with organisers forecasting 25 million visits to the global showcase over the next six months through to March 31, 2022, despite continued concerns over the coronavirus pandemic.
Buamim added: "Expo 2020 Dubai is a turning point and catalyst for Dubai’s sustainable economic growth, while it will change the dynamics of Dubai’s trade relationships and business community. The impact of Expo 2020 will be reflected on all economic and non-economic indicators in Dubai, and we will witness a growth in the tourism, hospitality, travel and retail sectors, attracting quality investments in addition to attracting business delegations from all over the world.
"It represents an unprecedented opportunity for businesses of all sizes, international organisations and government entities from across the world, to come together to foster a more diversified and resilient global economy."
It comes as figures revealed by IHS Markit show Dubai’s non-oil private sector grew for a tenth-straight month. Its Purchasing Managers’ Index for the Middle East’s main business hub was at 51.5 in September, above the 50 mark that separates growth from contraction, but down from 53.3 the previous month.
“The Dubai non-oil sector saw a dip in demand during September,” said David Owen, economist at IHS Markit. However, “the Expo 2020 has now begun, which should drive increased sales in the services sector over the next six months at least. Whilst IHS Markit predicts that the direct growth impact from the event will be modest, the latest PMI data highlighted a considerable impact on near-term business confidence”.
The IHS Market report further reported:
- Dubai’s construction industry led the overall fall with new work dropping for the first time since June.
- Travel and tourism saw an uptick driven by increased demand from Expo 2020.
- Employment levels rose only slightly and by the least in four months.
- Input costs rose but the rate of cost inflation was marginal leading to a reduction in the price average.