The business setup scene in Dubai shows a brighter outlook for the upcoming months due to more projects and the seasonal tourism rise that will lead to stronger revenues.
The Department of Economic Development (DED)’s quarterly review found that more than 88% of companies expect an increased growth in revenues throughout the rest of the year, as the government continues to settle varied initiatives to quicken economic growth and strengthen Dubai’s reputation as a business hub and top destination among foreign investors.
The services sector in Dubai continues to diversify and progressively improve efficiencies. Manufacturing, for instance, is one of the focus sectors in Dubai’s goal to become a global business hub and innovation centre.
There has been an increase from 112.7 points in Q2 2018 survey, to 118.5 points during Q3 2018 in terms of Dubai’s overall Business Confidence Index (BCI). This economic indicator measures the amount of optimism that entrepreneurs feel about their company’s future endeavors and state.
The Q4 2018 sees a largely stronger revenue projection as compared to the third quarter with net balance up from 33% to 42%. With the seasonal rise, the net balance has improved from 29% for Q3 2018 to 34% for Q4 2018. Nearly half (46%) of the entrepreneur participants expect higher volumes during Q4 2018, boosted by higher demand, more clients, and new projects while 42% anticipate stable conditions.
While Dubai’s services sector is significantly positive about its business prospects based on the following parameters – hiring, pricing, volumes, revenues, profits, and new purchase orders – trading is found to be the least confident across all parameters in the survey.
Based on the results of the survey, companies focused on domestic markets hold stronger predictions compared to exporters for all parameters with BCI scores of 118.5 and 111.6 points, respectively. BCIs for Small and Medium Enterprise (SMEs) and large companies garnered 111.0 and 123.5 points, respectively.
The percentage of businesses that expect an improved corporate setting stands at 52% for Q4 2018 (compared to 45% for Q3 2018) and 39% expect stable results in the final quarter.
Furthermore, 43% of the participants do not foresee any difficulties to their business operations during Q4 2018. The main challenges for business setups and expansions in Dubai are its tough market and demanding conditions.
With Dubai’s goal to transform into a major industrial and export hub, it appears to have increased efforts to bring in more aptitude into the manufacturing sector.
The manufacturing sector companies have a brighter outlook regarding their expansion capacity (66%), versus 65% of services firms and 60% of trading companies in Q3 2018. On the other hand, services firms are more positive about technology upgrade plans (69%), as compared to manufacturing (65%) and trading firms (59%).
It would appear that the rumours regarding a slowing economy are easily dispelled by the statistics showing improving conditions. Many businesses are looking to setup a company in Dubai in readiness for a strong market in 2019.