Business confidence up across Gulf

Business confidence rose across almost all Gulf countries in the first quarter of 2010, according to the latest HSBC Gulf business confidence index. Only Bahraini business people saw a slight dip in confidence.

Compared to the first quarter of 2009, the overall business confidence index has risen by over 20 points, indicating that the region's business people are far more positive about their prospects than a year ago. Specifically, the last calendar year has seen a marked trend upwards of business people expecting growth in both revenue and profit. 

Saudi Arabia continues to be the most optimistic in the GCC, leading the index at 96.3 points. While most countries are trending up, Bahrain, at 82.6 points, is the only country to show a decline over the last two quarters.

While confidence is clearly up on 2009, the index remains below the buoyant levels of 2007 and early 2008. The UAE has the lowest business confidence in the region. Business confidence in the UAE recorded a lower score than any other country in the first quarter of 2009, but it has recovered more gradually than other countries. The first quarter 2010 index stands at 76.6, up from 57.9 year on year.

"Confidence does look to be up across the entire region. 2009 saw a profound dip in the Gulf economy with a clear impact on business confidence. However, what we're seeing is real signs of improvement across the region," said Tim Reid, HSBC co-head of global banking for the Middle East and North Africa region.

Reid added: "It remains to be seen if this is sustainable, but the increase in people expecting profits to rise and companies staffing up would suggest that the future is more positive."