Small businesses operating in the UAE are less optimistic about prospects for sales and growth over the next three months compared to the previous quarter, a new survey has revealed.
The sentiment survey, carried out by the Gulf Finance Corporation, a subsidiary of Shuaa Capital, also showed a decline in total orders received during the second quarter of 2015.
It said the ability of SMEs in the UAE to collect payments and to raise financing has decreased during the period while one in four respondents said they were less inclined to hire on a forward looking quarterly basis.
SMEs said priorities for the next quarter (Q3) are expansion into new geographies and investment in new infrastructure.
"The findings of the SME Sentiment Survey indicate a softening of the SME sector and are consistent with the trends we are currently seeing in the market," said David Hunt, CEO of Gulf Finance.
"The slowdown can be attributed to macroeconomic issues having a dampening effect on general market conditions, which, coupled with the generally quieter summer months, has had an impact on the performance and sentiment of the SME sector as a whole. That said, it is encouraging to note that outlook on sales and growth for the next quarter remain positive, albeit not as bullish as in the beginning of the year."
Nearly three quarters of respondents interviewed during the second quarter confirmed total orders received increased or significantly increased during the last quarter compared to 84 percent in Q1.
Ten percent fewer SMEs had a positive or very positive growth and sales outlook compared to Q1, the survey added.
Hunt added: "It is most interesting to note that as companies have decided to hold back on hiring or expanding their product range, they have decided to use that money to invest in infrastructure and geographical expansion.
"It is indicative of SMEs ambitions that many are looking outside the UAE for their next phase of expansion and are investing to meet the expected demand."
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