RIYADH: Saudi Arabia remains the most business confident country in the GCC (Gulf Cooperation Counci) - up to a level not seen since 2007, according to the latest Gulf Business Confidence Index released by HSBC, SABB's global banking partner. The survey, which tracks business sentiment in all six countries of the GCC, characterizes the mood of business people as "realistically optimistic". Predictions of revenue, maintenance of profits, budgets and meeting the targets all remain positive. And the index across all six countries remains at its highest for two years.
The survey also reflects that the mood of business people has been trending upward over the last seven quarters, after a low in late 2008, widely seen as the height of the financial crisis. While many of the markets surveyed have shown only a slight increase against Q1, 2010, the upward trend is more marked when viewed over the past year. From Q1, 2009 to date, the overall index has risen by over 15 points to 86. The survey is calculated using the results from Q1, 2007 as a base, with a score of 100.
Although the overall index remains below the heights of 2007 and early 2008, specific indicators show a positive outlook in key operational areas. Forecast growth for 2010 shows that 43 percent see an increase in business turnover in the Middle East, 40 percent see an increase in profit, and 33 percent are planning to increase investment.
"The index is an excellent indicator of perceived confidence around the region, but I believe the most illuminating details lie in the underlying data," said Simon Vaughan Johnson, regional head of commercial banking, HSBC Group, MENA.
"For instance, between the October 2008 and January 2009 surveys, the number of people who were pessimistic about meeting their targets almost doubled to 24 percent. That number has now returned to October 2008 levels of 13 percent, its lowest since the outset of the financial crisis. This mirrors what our customers are telling our teams around the region - companies are actively looking for new opportunities, whilst continuing to rationalize unnecessary spend, and streamline their operations to maximize revenue potential".
Over half of respondents were optimistic that the next three months would see increasing revenue for their companies, and 35 percent are anticipating revenue growth from international trade opportunities.
