By Staff writer
New survey says improvement in business confidence was underpinned by the higher oil prices in Q2
Business confidence in the UAE rebounded in the second quarter of 2016 from four-year lows in the previous quarter, a new survey has revealed.
The latest Global Economic Conditions Survey from the Association of Chartered Certified Accountants (ACCA) showed positive signs for businesses in the GCC in Q2.
It said this improvement in business confidence was underpinned by the higher oil prices in Q2, although prices still remain well below their highs of a few years ago.
ACCA said a continued focus on diversification for the region remains important, adding that government efforts to close the budget deficit are still required for the longer term economic stability of the region.
Responses by firms in the Middle East reflected this reduction in capital spending, with 43 percent of firms in the Middle East reporting a fall in government support in Q2, above the global average of 34 percent.
In addition most businesses believe this will continue, with 22 percent of them expecting a significant drop in government spending (compared with 19 percent globally).
Lindsay Degouve de Nuncques, head of ACCA Middle East, said: "It is encouraging to see that our members' business confidence has improved across the Middle East. Our most recent results showed that business confidence in the UAE increased by 26 points, having hit a four-year low in the first quarter across the region."
However, he warned that the prevailing mood globally is still far from bright.
"Although there has been a slight rise in confidence globally it is yet to translate into meaningful increases in capital expenditure and employment indices. Half of firms are still either cutting or freezing employment."
He added that the potential impact of Brexit will be felt globally for the foreseeable future.
"It would not be a surprise if global business sentiment fell again in Q3. And the potential for long-term uncertainty, as the UK negotiates its complex departure from the European Union, could weigh down on global confidence for some time to come."
Sounds more like giving excuses in advance for the next half yearly expectations, an actual barometer will be the fancy conferences/events scheduled in the coming months and how many MoU's are signed during those events and if any major projects (IT/Civil etc) are publicised....
Given that oil has lost some 20% in the last few months we know what to look forward for q3