GCC executives upbeat on growth
Dubai, November 11, 2012
About two-thirds of the Gulf Cooperation Council (GCC) executives are upbeat about growth in the next 12 months and they expect an increase of 5 – 15 per cent in profitability during the period, a report said.
Meanwhile, Bahrain showed the highest increase in business confidence in the third quarter of this year among the GCC states, according to the Q3 YouGov and McGill Consulting Group GCC Business Confidence Index.
Bahrain, which showed an increase of 2.3 points in the index, was followed by Kuwait and Oman.
While four GCC countries showed positive signs, confidence levels slightly declined in two countries -- the UAE (2.26 points drop) and Qatar, the study said.
Firms in the GCC continue to expect an increase of 5 – 15 per cent in profitability in the next 12 months. The positive trend is driven by diversification of their overall offerings due to the perceptions in Bahrain, Oman and Saudi Arabia, the study said.
Although not quite significant, prospects of new investment are seen in positive light this quarter with an increment of 1.46 points over the last quarter, it said. This change is primarily driven by Saudi Arabia due to positive outlook towards optimal investment opportunities and in Oman based on prospects of growth in revenue, the availability of manpower and reasonable operation costs.
Bahrain also showed an increment in the index with regard to investment, revenue and operating costs.
On the other hand a drop of 2.18 points was noticed mostly in Qatar, Saudi Arabia and Kuwait in attracting and retaining qualified talent, it said.
Nader Sabry, managing partner at McGill Consulting Group, said: “Capability building continues to be a growth barrier across all sectors in the region, it’s topped the agenda for so long that executives have become numb to it”.
Suhail Shaikh, director at YouGov said that the white collar talent pool in the region is limited to some extent and is shared by countries that project relatively greater stability on the economic and political front.
When it comes to sector confidence, consumer products still ranked as the number one sector even with a slight decline in optimism. While technology showed the higher jump from Q2 to Q3 by 6.22 points and moved up 11 ranks, Saudi Arabia and UAE contributed to this increase with Saudi Arabia claiming a positive outlook on revenue, investment (UAE as well), and competitive pressure and UAE also assured of growth in manpower, the study said.
On the other hand, and oddly enough the energy sector declined by 4.08 points dropping four ranks.
Sabry said: “Although energy is a relatively stable sector such fluctuations are quite normal and nothing to be alarmed about”.
Besides “Countries like KSA and UAE have been successful in improving their non-oil sector contribution to the GDP,” says Suhail Shaikh.
Firms in the GCC continue to expect an increase of 5 – 15 per cent in profitability in the next 12 months. This continues to be driven by diversifying their overall offerings due to the perceptions in Bahrain, Oman and Saudi Arabia.
GCC firms are finding financial solutions by balancing their debt sources between internal and external sources attempting to achieve sustainable growth. Shifts observed for the internal resources in Bahrain and UAE while external specified by Kuwait and Qatar. - TradeArabia News Service