By Andy Sambidge
Survey reveals optimism is especially high among manufacturing and services companies in emirate
Dubai's Expo 2020 victory has lifted business confidence in the emirate in the first quarter of 2014, according to a new survey conducted by Department of Economic Development.
Optimism is especially high among manufacturing and services firms, said the Business Confidence Index for Dubai.
The index stood at 135.5 points in Q1, an increase of 22.4 points from Q1 2013. New projects expected as a result of Expo 2020 are driving positive perceptions, a statement said.
The survey showed that large companies continue to have a stronger outlook compared to small and medium firms, as indicated by their corresponding index scores of 141.6 and 126.4, respectively.
Optimism with respect to selling prices, volumes and new purchase orders is the highest within the manufacturing sector, while optimism on hiring plans and net profits is the highest amongst service firms, the index added.
Selling prices are largely expected to be stable, with 73 percent of the respondents expecting "no change" while seven percent expect a decline due to stiff competition in the market as well as the effect of seasonal downturn associated with the second quarter.
Respondents forecasting an increase in sales volumes during Q2 2014 accounted for 63 per cent as against 54 per cent in the previous year
Businesses surveyed also said they are more confident on hiring compared to the same period last year but less confident compared to the previous quarter - 30 percent intend to increase their staff count in Q2 compared to 23 percent in Q2 2013.
The survey said manufacturing sector retained its lead with respect to expectations in terms of volumes sold, with 69 percent firms expecting an increase in sales volumes in the next quarter.
Within the services sector, firms in the construction, architecture and real estate sub-segment said they are extremely confident in respect to volumes of sales in Q2 while expectations were subdued in the hotels and restaurants segment.
A total of 502 companies in Dubai were covered in the Q1 survey.