The economy of Dubai looks set to sustain its growth momentum in 2013 with investor confidence on the return and increasing activity across core sectors, according to official data.
The composite Business Confidence Index for Dubai reached 135.9 points in the last quarter of 2012, a 10.8 percent increase compared to the previous quarter and a two percent growth from the same quarter of 2011.
More than 90 percent of the businesses polled in the quarterly business survey, conducted by the Department of Economic Development (DED) in Dubai during October to December, said they expected either higher or stable sales in 2013.
Brighter business outlook also boosted hiring prospects with 27 percent of firms revealing plans to increase their workforce in the first quarter of 2013 while 71 percent reported they would retain their current head count.
Sami Al Qamzi, director general of the Department of Economic Development, said: "The prevailing business sentiment in Dubai is strong evidence that economic growth in the emirate is steady and heading towards sustainability.
"Rising confidence in critical economic sectors and strengthening macroeconomic fundamentals are stimulating business and employment prospects in Dubai."
He said in a statement that the survey showed businesses across various sectors were buoyant on sales volumes, revenues and profits.
While 66 percent of the companies foresee improved sales revenue and 61 percent predict higher profits during the first quarter of 2013, 82 percent expect prices to remain stable, indicating that the increased revenue would come from a rise in real business activity, he added.
Among key sectors, expectations are the highest among trading firms, followed by services and manufacturing firms, the report said.
It added that two-thirds of companies in construction are awaiting new projects in the local as well as regional markets or expect to restart stalled projects.
The rebound in construction-related activity is also reflected in manufacturing as cement and glass manufacturers are more optimistic.
Key business challenges reported by SMEs and large enterprises are almost similar - competition, rental/lease cost, utility charges and business regulations.
Large firms said they are especially concerned about fees, regulations, competition and cost challenging their export orientation.
However, 65 percent of businesses said they plan to invest in expansion in Q1 2013, compared to 29 percent in Q4 2012.
Businesses also said they are more inclined to upgrade their technology as 46 percent reported plans to invest in this area in 2013 compared to 23 percent in the final quarter of 2012.
A total of 501 companies in Dubai were covered in the survey.For all the latest industry news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.