By Joanna Hartley
Confidence fell from 99.8 to 70.3 in the last three months across six Gulf states.
Business confidence in the Gulf has fallen sharply in the last three months in the wake of the global economic crisis, according to a survey released by HSBC Middle East bank on Tuesday.
Overall business confidence fell from 99.8 in August 2007 to 70.3 in January 2009, across the UAE, Saudi Arabia, Bahrain, Kuwait, Oman and Qatar, according to to the survey of 1,317 individuals representing their companies.
The UAE saw the steepest fall in confidence, dropping from 91.5 in October 2008 to 62.2 in January 2009.
Sentiment remained more resilient in Qatar and Saudi Arabia, which saw confidence fall from 91.3 to 88.7, and 94.7 to 85.7 respectively.
However, confidence in achieving improved overall performance this quarter compared with previous quarters, more than halved in 20 months - falling from 29 in May 2007 to just 12 in January this year
However, most of those taking part (25 percent) thought the economy would recover from its recent downturn in one year from now, although 16 per cent thought it woudl take longer than two years.
“The change in sentiment has been steep and rapid,” said Declan Hegarty, co-head of Global Banking at HSBC.
“Our clients are telling us that while they predict a marked slowdown in activity in 2009, they also remain confident that business and trade in the region will continue, albeit at a reduced level from recent years. This is a slowdown, not a halt,” he added.
Other findings showed responders were most pessimistic (26 percent) about keeping up with staffing requirements and most optimistic (37 percent) about growth in revenue during the next three months.
The business confidence index is based on expectation business and political situation and labour market.