Gulf business confidence 'drops to 18-month low'

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BUSINESS CONFIDENCE: The HSBC report showed positives and negatives about the attitude of the Gulf business community. (Getty Images)

Confidence across the Gulf business community has dropped to its lowest since February 2007 due the global slowdown according to a new survey by HSBC - but there is optimism for the future.

Results of the HSBC Gulf Business Confidence Survey, covering the third quarter of 2008, showed that 57 percent expect to see an increase in revenue in the next three months, 48 percent expect to increase their investment budget year-on-year and 47 percent expect to see profits this year.

Although confidence across the business community had dropped, 65 percent of respondents said the fourth quarter would be better than the third.

Bahrain and Saudi Arabia also registered a slight rise in confidence on the previous quarter, according to the report.

Despite the optimistic indicators, the survey also noted increased pressure on the region’s private sector with just 47 percent believing they would be able to grow or maintain their profit margins – the slowest figure recorded.

The survey also revealed maintaining staff was an issue with only a third optimistic about keeping up with staffing requirements.

“You would expect some caution to come into the market in difficult economic times. But the relatively strong outlook expressed by businesses in this survey serves as a reminder that the GCC is entering a slowdown, not a recession, and that these economies will continue to grow,” said Keith Bradley, HSBC’s regional head of Commercial Banking.

The third quarter survey of 2008 surveyed 1,524 respondents from all six GCC countries, with the majority coming from Saudi Arabia and the UAE.

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