Monday 28 November 2011
Businesses in the Gulf are more optimistic about growth in the year ahead than any other global region, except Africa, according to the annual ICAEW Global Enterprise Survey 2011 sponsored by SAP. More than three quarters expect to increase turnover, with many anticipating growth percentages in double digits.
The Global Enterprise Survey is an annual survey conducted among ICAEW Chartered Accountants working in business, in positions such as financial director, CEO and CFO, around the world. It surveys businesses’ growth expectations, challenges and opportunities, as well as views on globalisation and their home regulatory and taxation environment.
Coupled with the ambitious expectations for growth, Gulf businesses also believe some of the challenges they have faced in recent years will shrink. Those surveyed in the region believe challenges linked to customer demand will be less of an issue. The number of respondents in the UAE anticipating increasing pressure around customer demand has dropped from 42% to 28%.
Late payment by customers is also becoming less of worry. 32% in the UAE saw this becoming more of a challenge last year but only 13% believe it will be a worsening issue in the year ahead. However, respondents outside the UAE expect customer demand to be a greater challenge in the coming 12 months – increasing from 3*5 to 48%.
Amanda Line, Regional Director, ICAEW Middle East, said: “There have been several challenges for Gulf businesses over the past couple of years, however some of these are now retrenching and optimism is high.”
Increasing export or starting exporting is high on Gulf businesses’ agenda. Of those businesses who are currently exporting in the UAE, 70% expect to see export growth in the year ahead, while two in three reported export growth over the past year. Among Gulf non-exporters, more than half have plans to start over the next couple of years, with as many as one in three having definite plans.
This is higher than any other region surveyed. Among those currently exporting and those intent on exporting, help to better understand commercial laws in other markets is the most sought after type of information. This is higher than in other regions, where demand for intelligence on markets and sectors is seen as more needed.
Amanda Line, Regional Director, Middle East: “Fruitful expansion into other markets requires a lot of knowledge on law and culture as well as sector-specific intelligence. Proper research is a critical success factor.
"The governments across the Gulf region should continue to actively work with finance professionals, business advisers and organisations to provide access to and equip businesses with the information they need to take make the most of the opportunities that lie in export.”
Gulf businesses interviewed for the Global Enterprise Survey 2011 were also asked about the impact of the Arab Spring on their ability to trade outside the Middle East. A relatively small proportion of those trading internationally (16%) reported that it has made trading more difficult. The businesses interviewed in other global regions, those in Europe who trade in the Middle East are the most likely to be affected by the Arab Spring unrest (38%).
Other findings include:
- Availability of management skills and staff turnover are expected to become greater challenges in the year ahead for Gulf businesses outside the UAE (reported by 24% and 28% respectively)
- The most frequently mentioned business objectives for the next 12 months among Gulf businesses are increasing profitability and turnover growth, and improving return on capital. More than half of those surveyed (55%) also aim to increase cash balances and pay down debt.
The ICAEW Global Enterprise Survey 2011 - Gulf Report, sponsored by SAP, can be downloaded from: www.icaew.com/home/technical/business-and-financial-management/smes/enterprise-survey-report
Media enquiries:
Hasan Badwan, Hill & Knowlton, tel: +971 4 33 44 930, email: hasan.badwan@hillandknowlton.com
Kirstina Reitan, international media relations manager, tel: +44 (0)207 920 8607, email: kirstina.reitan@icaew.com