Dubai Business Survey - Q2 2018

Transcription

1 Dubai Business Survey - Q2 2018

2 INTRODUCTION The Department of Economic Development (DED) was established in March 1992, with the objective to organize, regulate and boost trade and industry within the Emirate of Dubai. In October 2008, HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Ruler of Dubai, issued Decree no. 25 giving full responsibility to DED to plan and regulate the overall economic performance of Dubai, supervise its functions and support the economic development to ensure that the objectives of the Dubai Strategic Plan are achieved. DED is still responsible for its traditional activities of business registration, licensing and commercial protection in Dubai. However, with four new agencies offices now under the umbrella of DED, the mandate has been extended to include: 1. Dubai SME 2. Dubai Exports 3. Dubai Investment Development Agency (Dubai FDI) 4. Dubai Competitiveness Office (DCO) In line with DED s new mandate, the Economic Information Division conducts a quarterly Business survey, in coordination with DED Agencies (Dubai Exports & Dubai SME) and in collaboration with Dun & Bradstreet South Asia Middle East Ltd., in order to provide a timely and objective assessment of business expectations and performance. This document summarizes the main findings of the survey for the second quarter of 2018.

3 AT A GLANCE A y-o-y comparison shows that the Composite BCI has gained 2.1 points from points in Q2, 2017 to points in Q2, On a quarterly basis, the Composite BCI is marginally lower by 4.0 points from points in Q1, The survey shows that the business outlook for Q3, 2018 is weaker than that of the previous quarter with respect to revenues, volumes, hiring, profits and new purchase orders. Expectations of higher volumes are strongest for the manufacturing sector. The Composite BCIs for SMEs and large companies is recorded at and points, respectively. Dubai s overall business community is less optimistic compared to exporters with Composite BCI scores of and points, respectively. Exporters have a stronger forecast than domestic-market oriented firms for most of the parameters in the survey. each of the respondents either anticipate an improvement or stability in Q3, In terms of business challenges, of the respondents do not expect any negative factors to hinder their business operations. 70% of the firms hope to expand their capacity in Q2, 2018 versus 71% in Q1, of the firms intend to invest in technology upgrade plans in Q2, 2018 compared to 68% in Q1, 2018.

4 2 The Department of Economic Development (DED) is a Dubai Government entity that has the mandate to help achieve the key strategic objectives of fostering Sustainable Economic Development and strengthening the Competitiveness of Dubai. In order to gauge the perceptions of the business community, DED conducts a quarterly business survey, to assess the level of current economic activity and the outlook of businesses for the next quarter. In addition, the survey elicits feedback from businesses on challenges that may impact growth and development and assesses their investment outlook for the coming twelve months. METHODOLOGY The quarterly business survey for Q2, was conducted with a total sample of 500 companies across the Emirate of Dubai. The sample included a mix of small, medium, and large enterprises and had adequate representation from the manufacturing, trading, and services sectors in proportion to their respective contributions to Dubai s GDP. Overall Sample 500 Figure: 01 Survey Sample Services (SME) 65 Manufacturing (SME) Large Companies Large Companies Manufacturing 11 Trading Services 33 Trading (SME) In order to gauge business outlook or expectations, the quarterly survey focuses on key indicators, such as sales revenue, selling prices, volumes sold, profits and number of employees. Respondents are asked to indicate if they expected an increase, decrease or no change in these parameters. The Q2, 2018 survey has captured the perceptions of companies across sub-sectors. 1 For the purpose of the survey, each quarter is defined as follows: Q1 is the period between January and March, Q2 is the period between April and June, Q3 is the period between July and September, and Q4 is the period between October and December of each year.

5 BUSINESS CONFIDENCE INDEX CALCULATIONS The Business Confidence Index (BCI) is calculated as a weighted average score of the following business outlook indicators: Selling Prices Volumes Sold Number of Employees Profits For each indicator, resulting scores are calculated using the net balance method: (% of positive responses - % of negative responses) For the Composite Business Confidence Index, the resulting scores are multiplied with their corresponding weights to arrive at a weighted average index score 2. This index is finally rebased so that Q2, 2011 = 100. Taking account of the economy s composition by firm size, the index is weighted by the relative contributions of SMEs and large businesses to Dubai s GDP. The final result is the following index calculation: Overall Index = 60% * (Large enterprise Index) + 40% * (SME Index). BCI scores are classified in the following three groups: BCI < 100, business expectations are negative BCI = 100, business expectations are stable BCI > 100, business expectations are positive When expressed with reference to the base quarter Q2-2011, the following interpretations hold (t and t-1 referring to two consecutive quarters): BCI(t)< BCI(t-1): business expectations are declining BCI(t) =BCI(t-1): business expectations are stable BCI(t)> BCI(t-1): business expectations are rising 2 Weighted Average BCI = [( Balance on Selling Prices) x (Parameter Weight)] + [( Balance on Volumes Sold) x (Parameter Weight)] + [( Balance on No. of employees) x (Parameter Weight)] + [( Balance on Profits) x (Parameter Weight)]

6 4 BUSINESS CONFIDENCE INDEX - Q2, 2018 Dubai s GDP is expected to grow at 4. in 2019, according to the International Monetary Fund (IMF), from a 3.4% pace this year, driven by government infrastructure spending ahead of Expo In line with this positive view, the UAE Central Bank added that the growth of the economy will be primarily driven by recovering oil prices, an expansionary fiscal stance and an upswing in investment ahead of Expo Meanwhile, the IMF has penciled in that VAT is expected to raise revenues by 1.5% of GDP in the long term. The forecast for Q3, 2018 is optimistic, with the Composite Business Confidence Index (BCI) at points in Q2, 2018 (A score of 100 indicates stable/neutral sentiments). Figure: 02 Composite Business Confidence Index - Q2, A y-o-y comparison shows that the Composite BCI has gained 2.1 points from points in Q2, 2017 to points in Q2, However, on a quarterly basis, the Composite BCI is marginally lower by 4.0 points from points in Q1, 2018 to points in Q2, Q2, 2017 Q1, 2018 Q2, 2018 Large companies continue to be more optimistic than SMEs with respect to the business outlook, with Composite BCI scores of points and points, respectively. Large companies are more confident than SMEs about their outlook with respect to volumes, hiring, profitability and new purchase orders. SMEs have displayed a better forecast for revenues and selling prices. Figure: 03 Business Confidence Index - Q2, SME INDEX LARGE COMPANY INDEX COMPOSITE BCI

7 OVERALL BUSINESS OUTLOOK - Q3, 2018 The survey shows that the outlook for Q3, 2018 is less optimistic than that for the previous quarter for most parameters: revenues, volumes, hiring, profits and new purchase orders. The lower expectations in Q3, 2018 are attributed to slower demand on account of the summer/holiday season, which in turn has lowered expectations for economic activity, implementation of VAT, intense competition and overall lack of projects. However, the forecast for selling prices is relatively firm over the quarter. Forecast Business Performance Q3, 2018 Table: 01 Q3, 2017 Q2, 2018 Q3, 2018 Parameter Increase Decrease No Balance Sales Revenue 41% 29% 54% 29% 50% 33% 33% Selling Prices 9% 10% 79% 81% -1% 76% 10% 75% 5% Volumes Sold 40% 30% 51% 33% 35% 29% No. of Employees 6% 75% 78% 10% 6% 75% 6% 76% Profits 21% 23% 40% 21% New Purchase Orders 41% 31% 46% 36% 31% 40% 30% Note: Increase % + Decrease % + % No = 100% A quarterly and yearly comparison shows that the net balance for volumes has declined from 30% for Q3, 2017 and 35% for Q2, 2018 to 29% for Q3, The manufacturing sector is most optimistic regarding its outlook for volumes for Q3, 2018, followed by the services and the trading sectors. The selling prices forecast is comparable to last quarter s level and has improved from Q3, A majority (75%) of the respondents anticipate no change in their selling prices, while expect their selling prices to increase. The services sector is most optimistic with respect to its outlook for selling prices for Q3, The outlook for net profits has weakened q-o-q in line with the weakening sentiments with respect to sales volumes. Hiring numbers have moderated over the quarter, but are slightly stronger on an annual basis.

8 6 Figure: 04 Sectoral Balances (Sales Volume), Quarterly Outlook - Q3, % 33% A comparison of projections among the key economic sectors shows that the manufacturing sector holds the strongest outlook for sales revenues, volumes, hiring, profits and new purchase orders. The services sector is most optimistic about their selling prices for Q3, Manufacturing Services Trading SECTOR-WISE OUTLOOK FOR SALES VOLUMES MANUFACTURING SECTOR The manufacturing sector s forecast for volumes for Q3, 2018 has strengthened over the quarter, but has moderated over the same period a year ago. 51% of the manufacturing firms hope to sell higher volumes in Q3, 2018 as they hope for new projects and orders. Figure: 05 Quarterly Balances (Sales Volume) - Manufacturing Sector 47% 35% 3 40% Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Manufacturing sub-segments most optimistic about their volumes for Q3, 2018 are food, metals, plastics and glass manufacturers.

9 SERVICES SECTOR According to the survey, the forecast for volumes is steady on a quarterly basis. The annual improvement in forecast is possibly due to respondents expectations of securing new orders/ projects and customers. Figure: 06 Balances on Sales Volume for Key Service Sectors, Quarterly Outlook Q3, % 55% 49% 55% 53% 46% 24% -6% -31% 40% CONSTRUCTION TOURISM & HOSPITALITY 56% 5 41% 4 49% 34% 3 33% TRANSPORTATION & LOGISTICS OVERALL SERVICES SECTOR Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Within the services sector, hotels & restaurants and transportation firms are bullish about their volumes in Q3, 2018, with a net balance of each. TRADING SECTOR The trading sector s forecast for volumes for Q3, 2018 is the weakest when compared to the manufacturing and services sectors. However, expectations have strengthened over the year.

10 8 Figure: 07 Quarterly Balances (Sales Volume) - Trading Sector 35% 23% 7% Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Key sectors optimistic of higher demand over the next quarter include the following: Traders of construction products are more optimistic about their volumes in Q3, All participants in this segment hope to sell higher volumes in Q3, Traders of auto related products are least optimistic; of these traders expect lower volumes due to slowing business conditions and VAT implementation. EXPECTED BUSINESS SITUATION Expectations regarding the business situation shows that an equal proportion of the respondents ( each) anticipate either an improvement or stability for Q3, 2018 versus 50% and 40% in Q2, The proportion expecting a deteriorating business situation stands at 10% for Q3, 2018, Q2, 2018 and Q2, Figure: 08 Expected Business Situation 48% 41% 50% 47% 51% 51% 40% 8% 10% 8% 8% 10% 10% Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Q2, 2018 Q3, 2018 Improvement Stability Deterioration of the survey participants do not anticipate any obstacles to their business operations in Q2, The implementation of VAT and competition continue to be key concerns impacting businesses in Dubai.

11 IN FOCUS Temporary license freeze and installment facility DED offers temporary license freeze and installment facility on fees and fines aimed to help businesses overcome obstacles and remain competitive. The Department of Economic Development (DED) in Dubai has launched a package to make it further easier for businesses to clear fines and renew their licenses. The package will allow businesses to pay their fees and fines in easy installments, freeze their trade license for a year and seek an amicable settlement with DED on commercial violations. The service package is part of enabling businesses to overcome obstacles and benefit from a credit facility that would allow them to maintain their competitiveness. DED had recently exempted companies and business establishments in Dubai from all fines imposed on them and granted them time until end of 2018 to renew their licenses. The new package allows for the payment of license renewal fees and accumulated fines through convenient instalments within 12 months. DED is extending the facility in co-operation with its strategic partner Aafaq Islamic Finance and a number of local banks. Business owners can approach any of the DED service centers located throughout Dubai or visit the DED website for more details on the facility. By taking such a decision, the Department of Economic Development is committed to enhancing competitiveness in Dubai through extending value added facilities that help business owners continue their activity and sustain their business. Eliminating all obstacles faced by companies is important to developing the economy and creating a competitive environment conducive to investment in Dubai. The licensee can benefit from the installment if fines and fees have been accumulated for more than a year. Investors can apply for the fees not to be paid and avoid fines in case they wish to temporarily freeze-doing business while retaining their license. The waiver applies to fines issued before 14/04/2018 and for fines issued after this date license holders can take advantage of the offer of amicable settlement and payment in instalments. The licensee who requests amicable settlement must not have benefitted from any other exemptions following the first fine issued after 14/04/2018. As such, license holders are entitled to a 50% reduction in the basic value of penalties issued for the first violation. It is well known that revitalizing businesses and offering improved flexibility to businesses and investors are a top priority for DED. Therefore, facilitating payment of fees and fines as well as license renewals will eventually enable Dubai to attract investors and reinforce itself as a global trading and economic hub. However, the new service package is an opportunity for investors and businesses seeking to renew their licenses or clear their penalties. It will allow businesses to go past hurdles and focus on growth and seeking further investments thus creating more new job opportunities.

12 10 DUBAI SME OUTLOOK Q3, 2018 SMEs account for a dominant share in Dubai s total business composition. 442 of the 500 firms that were interviewed as part of the survey are SMEs. These include micro, small, and medium enterprises as per Dubai s SME definition. The Composite BCI for SMEs moderated over the quarter to points in Q2, 2018 from points in the previous quarter, but is higher than the index value of in Q2, Forecast Business Performance (SMEs) Q3, 2018 Table: 02 Q3, 2017 Q2, 2018 Q3, 2018 Parameter Increase Decrease No Balance Sales Revenue 14% 29% 54% 28% 36% 50% 34% 34% Selling Prices 8% 81% -3% 76% 9% 75% 7% Volumes Sold 40% 30% 51% 3 34% 41% 29% No. of Employees 7% 77% 9% 6% 76% 6% 76% Profits 21% 23% 40% 40% New Purchase Orders 30% 47% 36% 3 41% 4 29% Note: Increase % + Decrease % + % No = 100% Key outlook indicators for the next quarter are summarized below. A quarterly comparison shows that SMEs are less optimistic about most parameters for Q3, 2018 than in the previous quarter. The outlook for selling prices has strengthened over the quarter and the year. In Q3, 2018, a majority 75% of the survey respondents expect stability in the parameter, while expect selling prices to increase on the back of rising costs of raw materials, VAT implementation, to tide over rising costs of doing business and other operational expenses. Hiring trends continue to remain firm over the quarter. Large companies are more optimistic than SMEs with respect to volumes, hiring, profitability and new purchase orders while the latter is optimistic about their revenues and selling prices. Manufacturing SMEs hold the strongest outlook for sales revenues, volumes, hiring, profitability and new purchase orders. Services SMEs hold a stronger outlook for selling prices. 51% of manufacturing SMEs and 34% of services firms forecast an increase in their capacity utilization rates in Q3, 2018.

13 DUBAI EXPORTERS OUTLOOK - Q3, 2018 The survey included 126 export-oriented manufacturing, trading, and services firms in Dubai. For the purpose of this report, an exporter is defined as an entity with exports accounting for or more of its consolidated sales. Although the business outlook of exporters has slipped marginally over the quarter, it is substantially stronger as compared to the previous year. The Composite BCI for exporters has registered a score of points in Q2, 2018 versus points in Q1, 2018 and points in Q2, Forecast Business Performance (Exporters) Q3, 2018 Table: 03 Q3, 2017 Q2, 2018 Q3, 2018 Parameter Increase Decrease No Balance Sales Revenue 48% 34% 30% 56% 33% 57% 31% Selling Prices 77% -1% 6% 78% 10% 8% 77% 7% Volumes Sold 24% 58% 29% 49% 10% 41% No. of Employees 6% 83% 5% 6% 75% 8% 75% 9% Profits 36% 25% 5 35% 47% 3 New Purchase Orders 14% 47% 25% 53% 36% 4 7% 46% Export Sales 35% 46% 57% 8% 35% 49% 58% 31% 47% Note: Increase % + Decrease % + % No = 100% Key outlook indicators for the next quarter are summarized below. The survey for Q3, 2018 reveals that exporters are slightly more confident than the overall business community with Composite BCI scores of versus points, respectively. The exporters highlighted stronger expectations than domestic-market oriented firms for sales revenues, selling prices, volumes, net profits and new purchase orders. The outlook for export sales has moderated over the quarter, but strengthened on an annual basis. 40% of the exporters have indicated plans to export to new markets in Q3, 2018 versus in the last quarter. The leading new markets for export diversification continue to be GCC and Africa. The key challenges faced by Dubai s exporting community related to exporting their goods and services outside the UAE include competition (6%), other challenges related to climatic conditions while exporting to other countries (3%), payment & collection risks and economic sanctions & embargo in key export markets ( in each case).

14 12 OVERALL BUSINESS PERFORMANCE Q2, 2018 Although the main purpose of the survey is to gauge business expectations for future activity, it also captures the actual changes in business performance from one quarter to another, as elicited from the feedback given by responding firms. Overall Business Performance Q2, 2018 Table: 04 Q2, 2017 Q1, 2018 Q2, 2018 Parameter Increase Decrease No Balance Sales Revenue -2 46% -29% -23% Selling Prices 2 67% % - 26% 63% - Volumes Sold - -26% -23% No. of Employees 64% - 69% -5% 7-4% Profits -26% 50% - 53% 34% -40% New Purchase Orders 3 49% - 41% - 34% - Note: Increase % + Decrease % + % No = 100% The net balance for volumes sold in Q2, 2018 was recorded at negative 23%, as registered an increase while reported a decrease in sales volumes. The decrease in volumes was a result of slow market conditions, fewer customers due to the summer/holiday season and competition. A majority (63%) reported that their selling prices were stable in Q2, 2018, while 26% had to lower their prices mainly due to competition and low demand. 7 of the firms were able to maintain the size of their labor force, while had to increase it to address business requirements. A slight uptick in volumes is reflected in the trend for purchase orders. 41% of the firms experienced an increase in the cost of labor due to a rise in the cost of living and hikes in wages & salaries, but it remained unchanged for 56% of the firms.

15 26% of the respondents were impacted by the rising cost of raw materials, while reported no change in the parameter. Rental costs increased for of the respondents. Of all the participants in the survey, 27% reported that they availed of bank finance during Q2, Of these, 29% reported an increase in the cost of finance, while 68% said that such costs remained unchanged. Figure: 09 Balances on Sales Volume for Key Sectors, Quarterly Output - Q2, % -34% 7% Manufacturing Trading Construction Transportation Tourism & Hospitality Overall Services ( Balance = % of respondents citing an increase - % of respondents citing a decrease) All key sectors reported weak economic performances during Q2, However, the construction subsegment registered positive economic performance due to an increase in the number of projects. Within the manufacturing sector, food manufacturers recorded a decline in their economic performance in Q2, While the overall net balance of the trading sector was negative, food & beverage traders recorded a positive economic performance in Q2, 2018.

16 14 SMEs PERFORMANCE Q2, 2018 Overall Business Performance (SMEs) Q2, 2018 Table: 05 Q2, 2017 Q1, 2018 Q2, 2018 Parameter Increase Decrease No Balance Sales Revenue 41% 4-24% 48% 36% -3-25% Selling Prices 10% 24% 66% -14% 2 58% - 26% 63% - Volumes Sold 4-46% -30% 36% -26% No. of Employees 66% -4% 68% -6% 7-4% Profits -28% 5 36% -40% 53% 34% -40% New Purchase Orders 33% 48% -14% 40% 41% -23% 35% - Note: Increase % + Decrease % + % No = 100% indicated a rise in their volumes in Q2, 2018 while registered a decrease, resulting in a net balance of negative 26%. A majority (7) of the SMEs reported stable hiring numbers in Q2, Large companies reported better economic performance than SMEs with respect to most parameters in the survey: revenues, volumes, hiring, profits and new purchase orders.

17 EXPORTERS PERFORMANCE - Q2, 2018 Overall Business Performance (Exporters) Q2, 2018 Table: 06 Q2, 2017 Q1, 2018 Q2, 2018 Parameter Increase Decrease No Balance Sales Revenue 31% 50% - 24% 46% 30% % -2 Selling Prices 9% 25% 66% - 24% 56% 4% 14% 25% 61% - Volumes Sold 24% 3-8% 25% 41% 34% - -27% No. of Employees % 73% -1% Profits 21% 41% % -21% 48% 35% -31% New Purchase Orders 25% 55% -5% 24% -14% 21% 35% 4-14% Export Sales 28% 56% % 29% - Note: Increase % + Decrease % + % No = 100% Exporters reported a stronger performance than domestic-market oriented firms with respect to sales revenues, with a net balance of negative 2 and negative 24%, respectively. Exporters registered better performance than domestic-market oriented firms for selling prices, hiring, profits and new purchase orders, while the latter performed better in terms of volumes. While manufacturing exporters achieved a relatively better performance for volumes (net balance of 0%), traders and services exporters recorded negative net balances of negative and negative, respectively.

18 16 KEY BUSINESS CHALLENGES IN DUBAI The survey highlights key challenges perceived by businesses at the end of Q2, 2018 that may affect near term business growth and development. of the survey respondents do not expect to face any hurdles in their business operations in Q2, 2018 compared to 49% in the Q1, Figure: 10 Figure: 11 Key Business Challenges, Q1, 2018 Key Business Challenges, Q2, 2018 No Negative Factors Competition VAT Implementation Demand/Market Conditions Delay in Payments/Receivables Increase in Operational Expenses Government Regulations/Fees Cost of Rental/Leasing Inflation Others* Availability/Cost of Finance Availability/Cost of Labor Availability/Cost of Raw Materials 9% 7% 7% 4% 3% 1% 1% 1% 49% No Negative Factors VAT Implementation Competition Delay in Payments/Receivables Demand/Market Conditions Increase in Operational Expenses Government Regulations/Fees Global/Regional Economic Conditions Inflation Impact of Oil Prices Cost of Rental/Leasing Availability/Cost of Raw Materials Availability/Cost of Finance Political Uncertainity in the Region Delay/No New Projects Availability/Cost of Labor Others* 8% 7% 5% 4% 3% 1% 1% 1% 1% *Others include purchasing power of customers, challenges surrounding pricing strategy, government policies of other countries, climatic conditions A summary of the major challenges facing Dubai s business community are as follows: 1. VAT Implementation: Out of the which consider this as a hindrance, 55% reported that this concern will increase. 2. Competition: of the survey respondents expect to get impacted by competition; 73% of the firms predict that this challenge will intensify. 3. Delay in Payments/Receivables: 8% of the firms face this obstacle in their business operations. 4. Demand/Market Conditions: 7% of the respondents operations are hampered by this challenge. 5. Increase in Operational Expenses: 5% of the firms are concerned about this challenge. The remaining concerns affected 4% or fewer of the participants. Competition and the implementation of VAT continues to be the top concerns affecting both large companies and SMEs. The exporting community also cited similar concerns.

19 INVESTMENT OUTLOOK The survey also gauges the business community s investment outlook with respect to capacity expansion and technology upgrade plans over a twelve-month horizon. Figure: 12 Do you Plan to Expand the Capacity of your Business? Q2, 2018 Figure: 13 Do you Plan to Upgrade your Technology? Q2, % 6 30% Q1, 2018 Q2, 2017 Q1, 2018 Q2, % 6 68% 64% 29% YES NO 3 YES NO 36% Respondents are less bullish about their plans to invest in capacity expansion on a q-o-q basis (70% in Q2, 2018 versus 71% in Q1, 2018). However, the current proportion is higher than the projections a year ago (6 hoped to invest in expansion in Q2, 2017). Respondents are also less bullish about their technology upgrade plans in Q2, 2018 vis-à-vis the previous quarter and the year ago. 6 of the firms intend to invest in upgrading technology in Q2, 2018 compared to 68% in Q1, 2018, and 64% in Q2, Key reasons cited by respondents for not considering expanding business capacity include satisfaction amongst applicable respondents related to size and scale of their current operations and/or prioritization towards achieving stability and profitability, over and above market expansion. Additionally, some businesses did not want to expand amid poor market conditions or lack of new projects. Trading sector firms are most optimistic about capacity expansion plans. 75% of trading companies versus 58% of manufacturing firms and 71% of services companies have expansion plans. Services firms are more optimistic of their plans to upgrade technology in Q2, 2018 with 66% planning to undertake such an activity, versus 58% of manufacturing firms and 60% of services firms. SMEs are more hopeful than large companies about investment in business expansion. 71% of the SMEs will invest in expansion plans compared to 64% of large firms. On the other hand, 71% of large companies are more bullish about technology upgrades versus 61% of SMEs. Exporters are more bullish of their intent to invest in capacity and upgrade technology than domesticmarket oriented firms.

20 Economic Information Division Economic Studies & Policy Sector P.O. Box: 13223, Dubai, United Arab Emirates Tel: Dir: Dir: Fax: