The fourth survey for the HSBC – MEED Middle East Business Confidence Index has been carried out and the results published in the current issue of Middle East Economic Digest.
The latest survey shows that while confidence among business leaders across the region remains high, inflationary pressures are beginning to make themselves felt. Areas of particular concern are labour shortages and the increasing cost of living.
The HSBC – MEED Middle East Business Confidence Index is based on an online questionnaire which seeks views on a wide range of issues facing businesses in the Middle East. These include economic prospects, drivers of change, regulation and liberalisation in the region’s economies, profitability, turnover and expectations for cross border trade.
Over 1,000 business leaders from around the region responded to the latest survey and their comments were analysed by YouGov, a leading UK-based market research agency which now has an office in Dubai. The survey was carried out in July. Respondents included commercial managers, procurement executives, recruitment executives and financial officers as well as CEOs and Chairmen of domestic and international companies.
In its lead article on the survey, MEED says “Respondents of the Middle East Business Confidence Survey (MEBCS) generally mirror the positive assessments of the region’s economists. On a scale of one to 10, prospects for economic prosperity over the next 12 months scored seven, continuing the upbeat outlook of the last survey in March this year. And although the HSBC-MEED Middle East Business Confidence Index (MEBCI) – based on a combination of the MEBCS and forward- looking economic data – returned a result slightly shy of that recorded in the spring, the indicators were still overwhelmingly positive. But rapid economic growth brings with it added risks. Besides concerns about government dependence on the volatile oil market, there are growing fears that the regional equity and property markets – both of which are experiencing astronomical growth – are bubbles waiting to burst. Inflationary fears are also creeping in.”
David Hodgkinson, Chief Executive and Deputy Chairman of HSBC Bank Middle East Limited, said: “The overall tone of this survey will not surprise those of us operating in these dynamic markets. But what the Index tells us is that a plateau, at least in terms of sentiment, may have been reached, and it helps us identify where the doubts might emerge, and whether the confidence is shared across the board or is in different pockets. A survey of this magnitude cannot be ignored by anyone planning business ventures in the region in the near to medium term future.”
Richard Baker, Managing Director of MEED Group, said: “The increasing wealth being generated from hydrocarbons has delivered a major surge in gross domestic product and liquidity across the gulf. This rapid economic growth has not surprisingly led to business confidence in the region remaining high and expectations for the future remaining positive.
The slight fall in the HSBC-MEED Middle East Business Confidence Index is however a clear representation that the optimism of business leaders in the gulf is slightly tempered by inflationary and labour supply pressures.”
The principal countries covered by the survey are UAE, Bahrain, Qatar, Oman, Jordan, Saudi Arabia, Egypt and Kuwait. These nations correspond to the principal markets for HSBC Bank Middle East Limited, HSBC Bank Egypt, The Saudi British Bank (an associate company of the HSBC Group) and MEED.
