DUBAI: Businesses in Dubai expect the economy to hold steady through the second quarter of 2016 after the first quarter saw strong performance across the manufacturing, services, transport and construction sectors, according to a new survey.
The quarterly business survey conducted by the Department of Economic Development (DED) in Dubai showed 47 percent of respondents expect the situation to remain stable, with 39 percent looking forward to an improvement in the second quarter of 2016. Overall, 83 percent of the 501 businesses said they do not expect any new challenges to their operations, compared to just 55 percent in Q4 2015.
The Composite Business Confidence Index for Q1 2016 stood at 116.5 points compared to 116.1 points in the previous quarter. It indicated that larger firms appear more confident than SMEs, with BCI scores of 121.0 and 109.6 respectively. Expectations on sales revenues, selling prices and volumes are generally lower compared to Q4 2015 but businesses are modestly more optimistic on their Q2 profits, the survey said. It added that the subdued forecast for selling prices is also indicative of the low rate of inflation recorded in Dubai (monthly rate of 0.22% in February).
With respect to sales volumes, 45 percent of companies said they anticipate an increase and 14 percent forecast a decrease. While the manufacturing sector is more optimistic about volumes for Q2 2016, the seasonal decline in economic activity during summer has had its impact on the services sector. Among the three main sectors (industry, services and trade), the trading sector is the most optimistic on revenues and volumes, the survey showed, while the manufacturing sector is the most upbeat on profits and the services sector, on selling prices and hiring.
