Dubai’s business community’s confidence level and optimism have shown a remarkable upswing on the back of brightening economic growth outlook and promising opportunities the emirate offers for investors and companies.
A survey by Dubai Chambers revealed that the emirate’s Business Climate Index rose to 168 points for Q1 2024, up from 144 points during the same period last year, underscoring the increasing confidence and optimism of the private sector businesses.
“The findings of the survey underline the importance of efforts to accelerate the pace of growth across all economic sectors and further enhance the emirate’s favourable business environment,” said Mohammad Ali Rashed Lootah, president and CEO of Dubai Chambers.
“Creating conditions that are conducive to growth strengthens the private sector’s confidence in Dubai’s ability to generate sustainable investment opportunities and ensure the emirate remains at the forefront of the global business landscape,” he said.
In the first nine months of 2023, Dubai’s economy expanded by an annual 3.3 per cent, driven by growth in the emirate’s tourism and transportation sectors, reflecting the emirate’s favourable economic climate, robust world-class infrastructure, pro-business regulations and deep talent pool which together consistently draw in a diverse array of investors and entrepreneurs from all corners of the globe.
The Central Bank of the UAE has raised its forecast for the Gross Domestic Product growth for the UAE in the coming year, 2024, to 5.7 per cent, compared to its previous projection of 4.3 per cent. The apex bank anticipates a non-oil GDP growth of 5.9 per cent in 2023 and 4.7 per cent in the following year, while estimating the oil GDP growth at 8.1 per cent in 2024.
The survey, which gathered the opinions of 507 CEOs and managers of companies operating in Dubai, indicates that 63 per cent of participants anticipate development within the emirate’s business climate during the first three months of 2024. Some 60 per cent of respondents expect their companies’ sales to increase during Q1 2024 compared with the previous quarter, while 29 per cent believe sales will remain at a similar level to those achieved during the fourth quarter of last year.
The survey revealed that 41 per cent of respondents plan to expand into new markets at both regional and global levels during Q1 2024. GCC countries topped the list of target markets, followed by India, the United Kingdom, the United States, Egypt, and South Africa. Among the 59 per cent of respondents who do not plan to expand during this period, 25 per cent indicated that they are currently focused on expanding within local markets.
Some 57 per cent of respondents plan to diversify their products or services during Q1 2024, while 47 per cent aim to increase production capacity. A total of 44 per cent of respondents plan to increase their digital advertising budgets, and 42 per cent indicated that they are in the process of obtaining additional capital.
The chamber’s survey shows that in terms of the most significant cost management measures anticipated during the first quarter of 2024, 43 per cent of respondents intend to review or change their supplier lists, and 41 per cent plan to either negotiate the cost of renting their premises or transfer their operations to more affordable spaces.
On the digital front, 38 per cent of the respondents confirmed that they had applied digital technologies in their businesses during Q4 2023. Factors influencing this trend included easing access to new markets (52 per cent), reducing costs (49 per cent), enhancing competitiveness (44 per cent), developing new products (26 per cent), and ensuring compliance with new regulations (22 per cent).
The survey shows that the most prominent services and areas targeted by participants who plan to leverage digital technologies in Q1 2024 include digital payment solutions (24 per cent), digital marketing (21 per cent), e-commerce (17 per cent), and artificial intelligence (12 per cent).