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UAE Freezones Biz News Updates
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UAE financing conditions lift business sentiment
Businesses in the UAE are reinvesting earnings and showing increased
dynamism in the second quarter of 2013 despite tighter demand and cash-flow
conditions, a new study revealed.
The latest survey showed that the current conditions in the UAE have given a
boost to business confidence in the region, with 40 per cent of businesses
taking part in the survey reporting an increase confidence in the prospects
of their organisations, up from 33 per cent in the previous quarter.
The Global Economic Conditions Survey, or GECS — from the Association of
Chartered Certified Accountants, or Acca, and the Institute of Management
Accountants, or IMA — shows that only 18 per cent of the respondents
reported a loss of confidence.
The Gecs, the largest quarterly economic survey of accountants in the world,
gauges the views of Acca and IMA finance professionals.
Emmanouil Schizas, the Acca’s senior economic analyst and editor of the Gecs,
said across the globe, the survey shows the highest level of optimism about
the national and global economies in two years, and the strongest
year-on-year improvement in three years.
“Businesses in the UAE reflect that confidence. Right now, they are
experiencing the best financing conditions in the world as a result, in
part, of a greater supply of growth capital over the last 12 months and a
significant amount of monetary stimulus at the global level.”
Schizas pointed out that despite continued positive news about the global
and national economies, the Gecs business confidence index has just about
inched in the right direction.“After a surge in business confidence in the
first quarter that was perhaps a little premature, confidence levels are now
in line with fundamentals.”
“What is encouraging is that the marginal improvement in global business
dynamism in early 2013 has now accelerated across all measures of
investment, orders and employment. Employment in particular is recovering
quickly and is now stronger than at any point in the last two years,” said
Schizas.
“UAE finance teams are looking at the numbers and telling us that the
businesses they work for are demonstrating greater dynamism and funding is
going more into organic growth. The knock-on effect is a boost to capacity
building — investment in both capital and employees — for the businesses in
UAE. Better access to growth capital is adding to these trends, which are
reflected in the high confidence levels of the business community,” said
Susie Isaacson, the Acca’s head of the UAE.
“Respondents in the UAE have traditionally expected government spending to
rise substantially in the medium term, but are now beginning to revise their
expectations further upwards. A loosening of fiscal policy in the medium
term is bound to have an impact on confidence and economic performance.”
The survey revealed that despite rising confidence, faith in the global
recovery has fallen marginally, even though it is still higher in the UAE
than any other major Acca or IMA market. More than two-thirds, or 68 per
cent, of the Emirates’ sample are optimistic about the recovery, down from
70 per cent in the first quarter 2013.
However, the survey shows that it is a different story across the wider
Middle East region, with business confidence taking a hit, despite a rise in
business capacity and improving access to growth capital. One-third of
Middle East-based respondents taking part in the survey reported a loss of
confidence in the prospects of their organisations, due mostly to rising
cash flow and demand pressures.
Another finding of the survey is that faith in the global economic recovery
has never been stronger in the last 18 months, with 59 per cent of finance
professionals in Middle East sample reporting a more positive outlook.
On a global scale, the Gecs found both business confidence and optimism
about the economy continued to rise during the second quarter of the year.
Nearly half of the Gecs sample, or 47 per cent, felt that the state of the
economy was improving or about to do so, up from 43 per cent in early 2013,
while just under 50 per cent were pessimistic, predicting deterioration or
stagnation, down from 54 per cent in the first quarter.
This is the highest level of optimism about the national and global
economies in two years, and the strongest year-on-year improvement in three
years.
The survey also revealied that there was improved availability of growth
capital on a global scale in the second quarter of this year, which was
driving confidence upwards.
Aug 3, 2013 |
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Courtesy Khaleej Times.
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