Dubai Business Survey - Q4 2017

Transcription

1 Dubai Business Survey - Q4 2017

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 fourth quarter of 2017.

3 AT A GLANCE A y-o-y comparison shows that the Composite BCI has declined by 5.0 points, decreasing from points in Q4, 2016 to points in Q4, 2017, with respondents anticipating lower volumes, profits and employment in Q1, The Composite BCI has tracked lower from points in Q3, 2017 to points in Q4, The net balances for sales revenues, volumes, employment, profits and new purchase orders have displayed q-o-q and y-o-y declines. Expectations of higher volumes are strongest for the services sector and weakest for the trading sector. The Composite BCIs for SMEs and large companies stand at and points, respectively. Dubai s overall business community maintains stronger projections compared to exporters with Composite BCI scores of and points, respectively. Domestic-market oriented firms have displayed a stronger forecast than exporters for all the parameters in the survey. Expectations regarding the business situation show that the proportion of firms anticipating an improvement has declined from 4 for Q4, 2017 to for Q1, 2018, while those expecting stability has increased from to 51%. 36% of the respondents do not expect any negative factors to hinder their business operations. Plans to upgrade technology and expand capacity have improved both on a quarterly and annual basis. 6 of the respondents plan to invest in upgrading technology in Q4, 2017 versus 6 in Q3, 2017 and 61% in Q4, of the firms intend to invest in capacity expansion in Q4, 2017 compared to 65% in Q3, 2017 and 57% in Q4, 2016.

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 Q4, was conducted with a total sample of 506 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 506 Figure: 01 Survey Sample Services (SME) 71 Manufacturing (SME) Large Companies Large Companies Manufacturing 12 Trading Services 35 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 Q4, 2017 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 - Q4, 2017 Dubai s budget for 2018 targets boosting infrastructure spending for Expo The budget will create 3100 new jobs, coupled with the growth of the social development sector. Further, the UAE introduced its Value Added Tax (VAT) on 01, January, 2018 in a bid to boost revenues. The UAE is expected to raise around USD 3.3 Bn from the tax. The forecast for Q1, 2018 is optimistic, with the Composite Business Confidence Index (BCI) at points in Q4, 2017 (A score of 100 indicates stable/neutral sentiments). Figure: 02 Composite Business Confidence Index - Q4, Q4, 2016 Q3, Q4, 2017 A y-o-y comparison shows that the Composite BCI has declined by 5.0 points, decreasing from points in Q4, 2016 to points in Q4, 2017, with respondents anticipating lower volumes, profits and employment in Q1, A quarterly comparison shows that the Composite BCI has slipped from points in Q3, 2017 to points in Q4, The Composite BCIs for SMEs and large companies stand at and points, respectively. Large companies continue to be more optimistic than the SMEs with respect to the business outlook, with Composite BCI scores of points and points, respectively. Large companies are more confident than the SMEs about their outlook for revenues, volumes, hiring, profitability and new purchase orders. SMEs have displayed a stronger forecast for selling prices. Figure: 03 Business Confidence Index - Q4, SME INDEX LARGE COMPANY INDEX COMPOSITE BCI

7 OVERALL BUSINESS OUTLOOK - Q1, 2018 The survey shows that the outlook for Q1, 2018 is less optimistic than that for Q4, 2017 for most parameters, affected by the potential impact of the VAT implementation, stiff competition and low market demand. The outlook for hiring is comparable to the Q4, 2017 and Q1, 2017 projections. Forecast Business Performance Q1, 2018 Table: 01 Q1, 2017 Q4, 2017 Q1, 2018 Parameter Increase Decrease No Balance Sales Revenue 54% 3 56% 32% 47% 21% 32% Selling Prices 7 3% 1 11% 71% 7% 36% 56% 2 Volumes Sold 53% 50% 13% 40% 1 22% No. of Employees 21% 4% 75% 17% 22% 6% 72% 16% 22% 6 13% Profits 51% 1 36% 2 33% New Purchase Orders 51% 43% % 16% The net balance for volumes has shown a y-o-y and q-o-q weakening; from for Q1, 2017 and for Q4, 2017 to 22% for Q1, For Q1, 2018, 40% of the firms anticipate a rise in volumes backed by expectations of new projects/orders and higher demand for their products. However, 1 of the respondents forecast a decline in volumes due to slowing business conditions, VAT implementation and lack of demand. The services sector is most optimistic regarding its outlook for volumes for Q1, 2018, followed by the manufacturing sector. The selling prices forecast is stronger compared to the previous quarter, driven by expectations of higher demand and more projects in the pipeline. The trading sector is most optimistic with respect to its outlook for selling prices for Q1, The profitability forecast is in line with projections for volumes and revenues. Hiring expectations are firm both on an annual and quarterly basis.

8 6 Figure: 04 Sectoral Balances (Sales Volume), Quarterly Outlook - Q1, % 7% A comparison of projections among the key economic sectors shows that the services sector holds the strongest outlook for sales revenues, volumes, new employees, net profits and new purchase orders. The trading sector is most optimistic about selling prices during Q1, Manufacturing Services Trading SECTOR-WISE OUTLOOK FOR SALES VOLUMES MANUFACTURING SECTOR Respondents in the manufacturing sector are less confident about their volumes for Q1, 2018 than they were in the previous quarter or for Q4, 2017 due to lack of new projects, lower demand and slowing market conditions. However, 50% of all manufacturers expect stability in their volumes during Q1, 2018, while another 33% of the firms anticipate an increase in volumes in expectations of more business in the first quarter of Figure: 05 Quarterly Balances (Sales Volume) - Manufacturing Sector 52% 5 47% 16% Q4, 2016 Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Manufacturing sub-segments most optimistic about their volumes for Q1, 2018 are furniture, cement, aluminium, metals and glass manufacturers. Food manufacturers are not as confident about their volumes in Q1, 2018.

9 SERVICES SECTOR Firms in the services sector have displayed a stronger forecast for their volumes for Q1, 2018 when compared to the manufacturing and trading sectors. Expectations of higher demand in terms of acquiring new customers/ projects/contracts/orders have backed the optimistic outlook of the services sector for Q1, Figure: 06 Balances on Sales Volume for Key Service Sectors, Quarterly Outlook Q1, % 75% 4 55% 55% 51% 63% -6% 24% 76% CONSTRUCTION TOURISM & HOSPITALITY 27% 56% 34% 2 47% 4 TRANSPORTATION & LOGISTICS OVERALL SERVICES SECTOR Q4, 2016 Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Within the services sector, hotels and restaurants are most bullish about their volumes during Q1, 2018, with a net balance of 5. This optimism is due to expectations of higher number of tourists especially during the winter season. Among construction firms, 52% are optimistic of an increase in volumes during Q1, 2018 with expectations of getting new projects/contracts. In the transportation segment, 50% of the respondents expect higher volumes during Q1, 2018, while 16% project a decrease, resulting in a net balance of 34%. TRADING SECTOR The trading sector s forecast for volumes for Q1, 2018 is weaker when compared to the previous quarter and in the same quarter a year ago. While 33% of the traders anticipate to sell higher volumes during Q1, 2018, expect a decline in the parameter. The survey shows that traders hold the weakest forecast for most parameters: revenues, volumes, hiring and new purchase orders.

10 8 Figure: 07 Quarterly Balances (Sales Volume) - Trading Sector 36% 23% 7% Q4, 2016 Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Key sectors optimistic of higher demand over the next quarter include the following: Traders of construction related products are more optimistic about their volumes in the first quarter of % hope to sell higher volumes during Q1, 2018, while the remaining 50% anticipate stability. None of the respondents in this segment anticipate a decline in volumes. Auto traders are least optimistic; 50% of these traders expect lower volumes due to slowing business conditions in Q1, EXPECTED BUSINESS SITUATION Expectations regarding the business situation show that the proportion of firms anticipating an improvement has declined from 4 for Q4, 2017 to for Q1, While the proportion of firms expecting stability has increased from to 51%, those expecting deterioration is at for both Q4, 2017 and Q1, Figure: 08 Expected Business Situation 50% 47% 4 47% 51% 51% 7% Q4, 2016 Q1, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q1, 2018 Improvement Stability Deterioration Further, 36% of the survey respondents do not anticipate any obstacles to their business operations during Q4, The key challenges faced by Dubai s businesses are competition, the potential impact of VAT implementation and increase in operational expenses.

11 IN FOCUS Prospects for Dubai s Economy Economic Outlook for 2018 The section briefly examines developments in Dubai s economy using 2017 estimates for GDP growth based on official statistics covering Q1, 2017 and DED forecasts for the full year 2017 and Projected growth figures for 2018 are based on trends in the global and regional economy impacting Dubai and the major driving forces that will shape growth in the main sectors of Dubai s economy in 2018 such as the introduction of VAT, the preparations for hosting Expo 2020, the implementation of the Dubai Industrial Strategy (2030) and of the Dubai 2021 Master Plan. Dubai s Economic Growth Real GDP in 2017 is estimated to have grown by a slightly increased rate over 2016 to 3.2% rising to a predicted rate of 3.5% in 2018 as a result of the more favourable influence of global economic trends described above including higher growth in most of the developed economies. If world trade and GDP continues to rise as predicted by most international institutions in 2018, the openness of Dubai s economy will bolster its growth. Regional trends are also looking more favourable than in Rising growth in GDP is expected in India, one of Dubai s major trading partners, coming in at around 7.5% in 2018, a level higher than China. Furthermore, after a period of adjusting to lower oil prices, the other GCC countries, most significant buyers of Dubai s exports and re-exports, are anticipated to be looking at a rebound in GDP to just over 2.0% in Public Finance Aggregate demand in Dubai was boosted in 2017 with the start of future infrastructure projects connected with Dubai s hosting of Expo The expansionary fiscal impact on the economy with a public sector deficit expected to be 2.5% of GDP in 2017 will be greatly reinforced by Dubai s 2018 budget. Public expenditure will rise by 19.5% y-o-y to reach AED 56.6 Bn, its highest level ever. Public sector revenues are budgeted to rise by 12.5% to AED 50.4 Bn and while an operating surplus of AED 2.5 Bn is planned. The rise in capital spending on construction projects at 21% of all spending will produce an expansionary public sector deficit of AED 6.2 Bn or 1.5% of 2018 GDP. Most of the rise in spending is a result of additional investment in Dubai s infrastructure and the government will allocate a further AED 5 Bn within 2018 to spending on Expo 2020.

12 10 DUBAI SME OUTLOOK Q1, 2018 SMEs account for a dominant share in Dubai s total business composition. 443 of the 506 firms that were interviewed as part of the survey were SMEs. These included micro, small, and medium enterprises as per Dubai s SME definition. SMEs in Dubai are less upbeat about Q1, 2018 than they were for Q4, 2017; the Composite BCI has slipped 3.2 points from points in Q3, 2017 to points in Q4, Forecast Business Performance (SMEs) Q1, 2018 Table: 02 Q1, 2017 Q4, 2017 Q1, 2018 Parameter Increase Decrease No Balance Sales Revenue 54% 3 56% 32% 47% 22% 31% Selling Prices 7 3% 17% 11% 72% 6% 7% 56% 30% Volumes Sold 53% 4 13% 3 36% 1 43% 21% No. of Employees 22% 4% 74% 1 21% 6% 73% 15% 21% 70% Profits 51% 1 36% 2 32% 24% New Purchase Orders 52% 40% 47% 16% 23% Key outlook indicators for the next quarter are summarized below. A quarterly comparison shows that SMEs are less upbeat about most parameters for Q1, 2018 than in the previous quarter. A y-o-y comparison also shows weakened forecasts for most parameters. The outlook for selling prices is positive as of the respondents expect an increase in the parameter due to the VAT implementation. Large companies continue to be more optimistic than the SMEs with respect to revenues, volumes, hiring, profitability and new purchase orders, while the latter is confident about their selling prices. Services SMEs hold the strongest outlook for sales revenues, volumes, hiring, profitability and new purchase orders. While the trading sector is most optimistic about their selling prices in Q1, 2018, they hold a weak outlook for revenues, volumes, new emplyees and new purchase orders. 31% of manufacturing SMEs and of services firms forecast an increase in their capacity utilization rates during Q1, 2018.

13 DUBAI EXPORTERS OUTLOOK - Q1, 2018 The survey included 113 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 20% or more of its consolidated sales. The business outlook of exporters has weakened on an annual and quarterly basis. The composite BCI for exporters has registered a score of points in Q4, 2017 against points in Q4, 2016 and points in Q3, Forecast Business Performance (Exporters) Q1, 2018 Table: 03 Q1, 2017 Q4, 2017 Q1, 2018 Parameter Increase Decrease No Balance Sales Revenue 13% 32% 53% 33% 40% 15% Selling Prices 80% 0% 15% 71% -1% 33% 5 24% Volumes Sold 13% 43% 31% 50% 15% No. of Employees 7% 7 7% 1 7% 74% 7 2% Profits 15% 20% 34% 31% 2 40% 2% New Purchase Orders 13% 4 50% 13% 36% 1 17% Export Sales 54% 11% 34% 40% 15% Key outlook indicators for the next quarter are summarized below. The survey for Q4, 2017 reveals that exporters are less confident than the overall business community with Composite BCI scores of and points, respectively. Domestic-market oriented firms hold stronger predictions than exporters for sales revenues, selling prices, volumes, hiring, net profits and new purchase orders. The outlook for export sales has weakened on a quarterly and annual basis. 32% of the exporters have indicated plans to export to new markets during Q1, 2018 versus a corresponding in the last quarter. The leading new markets for export diversification are Africa, GCC and Europe. The key challenges faced by Dubai s exporters related to exporting their goods and services outside the UAE are competition (), legal & regulatory issues (6%), and currency fluctuations (5%).

14 12 OVERALL BUSINESS PERFORMANCE Q4, 2017 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 Q4, 2017 Table: 04 Q4, 2016 Q3, 2017 Q4, 2017 Parameter Increase Decrease No Balance Sales Revenue 2-3% 1-23% - Selling Prices 1 73% - 66% -16% 11% 1 71% -7% Volumes Sold 2-4% 1 40% -22% 32% -6% No. of Employees 13% 75% -1% 17% 6-3% 1 6-4% Profits 23% 30% 47% -7% 15% 4-33% 1-23% New Purchase Orders 2 47% -3% 21% - 27% 1% of the respondents registered an increase in volumes during Q4, 2017, while 32% experienced declines, resulting in a net balance of -6%. Factors that contributed to the decline in volumes included competition, lower demand for goods/services, reduced customer base, lack of new projects and poor market conditions. Selling prices remained stable for 71% of the firms, while 1 recorded a decline due to competition and fewer customers. A majority (6) kept the size of their labor force intact in Q4, 2017, while hired new staff for their business operations. Firms reported a slightly better performance with respect to new purchase orders both on a quarterly and annual basis. Labor costs increased for 3 of the firms due to a rise in the cost of accommodation and a hike in wages & salaries.

15 The cost of raw materials increased for of the respondents, while 3 reported stability in these costs. Rental costs were stable for 70% of the participants. of the firms availed bank finance during Q4, Of these, 74% did not experience any change in the cost of finance, while 22% reported an increase. Figure: 09 Balances on Sales Volume for Key Sectors, Quarterly Output - Q4, % - -33% -5% Manufacturing Trading Construction Transportation Tourism & Hospitality Overall Services Balance = % of respondents citing an increase - % of respondents citing a decrease The weakest sales volumes performance was recorded by trading firms. Within the trading sector, electronics and food & beverage traders reported negative net balances for volumes. In the services sector, firms in the transportation and the hospitality sub-segments registered negative performance as denoted by declining volumes. Within the manufacturing sector, aluminium and cement producers reported an increase in volumes.

16 14 SMEs PERFORMANCE Q4, 2017 Overall Business Performance (SMEs) Q4, 2017 Table: 05 Q4, 2016 Q3, 2017 Q4, 2017 Parameter Increase Decrease No Balance Sales Revenue 2-4% 17% - 24% -13% Selling Prices 17% 75% - 65% -15% 11% 1 71% -7% Volumes Sold 24% 2 47% -5% 1-23% 23% 34% 43% -11% No. of Employees 13% 75% -1% 1 70% -6% 13% 1 6-5% Profits 23% 30% 47% -7% % 17% 43% 40% - New Purchase Orders 2-4% 1 36% 43% -17% 2-4% With respect to volumes, 23% of the SMEs reported an increase, while 34% experienced declines in volumes. Selling prices and hiring remained unchanged for a majority of the SMEs. Large companies displayed better performance with respect to all parameters: revenues, volumes, prices, hiring, profitability and new purchase orders.

17 EXPORTERS PERFORMANCE - Q4, 2017 Overall Business Performance (Exporters) Q4, 2017 Table: 06 Q4, 2016 Q3, 2017 Q4, 2017 Parameter Increase Decrease No Balance Sales Revenue 22% -15% 22% 43% -13% -27% Selling Prices 21% 6-11% 11% 23% 66% - 65% -15% Volumes Sold 21% 40% -1-11% 1 40% -22% No. of Employees 11% 80% -2% 77% -5% 1 71% - Profits 20% % 43% 34% -20% 4 40% -36% New Purchase Orders 22% 36% % -15% Export Sales 21% - 23% 34% 43% -11% 27% 5-13% Domestic market oriented firms performed better than exporters for revenues, volumes, selling prices, hiring, profits and purchase orders. The net balance for volumes for exporters stood at -22% compared to -2% for domestic-market oriented firms. Trading exporters performed better in terms of economic activity (volumes) with a net balance of -11% compared to -27% for manufacturers and -33% for services.

18 16 KEY BUSINESS CHALLENGES IN DUBAI The survey also addressed key challenges perceived by businesses at the end of Q4, 2017 that may impact near term business growth and development. 36% of the respondents do not expect to face any hurdles in their business operations in Q4, 2017 compared to 2 in the previous quarter. Figure: 10 Figure: 11 Key Business Challenges, Q3, 2017 Key Business Challenges, Q4, 2017 No Negative Factors 2 No Negative Factors 36% Competition 24% Competition Demand/Market Conditions VAT Implementation Increase in Operational Expenses 11% Increase in Operational Expenses Delay in Payments/Receivables Demand/Market Conditions VAT Implementation 7% Delay in Payments/Receivables Government Regulations/Fees 5% Government Regulations/Fees 4% Availability/Cost of Finance 4% Inflation 2% Global/Regional Economic Conditions 3% Availability/Cost of Finance 2% Impact of Oil Prices 1% Political Uncertainity in the Region 1% Currency Fluctuations 1% Other Operational Challenges 1% Availability/Cost of Raw Materials 1% Availability/Cost of Raw Materials 1% Others* 2% *Others include logistics & transport concerns A summary of the major challenges facing Dubai s business community are as follows: 1. Competition: Of all the firms, that expect to get impacted by competition, 67% of the firms predict that it will intensify. 2. VAT Implementation: VAT implementation is considered as a hindrance to of the respondents. 3. Increase in Operational Expenses: of the respondents operations are hampered by this factor. 4. Delay in Payments/Receivables: of the firms face this obstacle in their business operations. 5. Demand/Market Conditions: of the firms are concerned about this challenge. The remaining concerns were relatively less important and each affected by 4% or fewer of the participants. The key hurdles faced by both SMEs and large companies were competition and the implementation of VAT. These concerns were also cited by exporters.

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? Q4, 2017 Figure: 13 Do you Plan to Upgrade your Technology? Q4, % 31% Q3, 2017 Q4, 2016 Q3, 2017 Q4, % 57% 6 61% YES NO 43% 32% YES NO Plans to upgrade technology have strengthened both on a quarterly and annual basis; the proportion of respondents intending to upgrade technology has increased from 61% for Q4, 2016 and 6 for Q3, 2017 to 6 for Q4, Capacity expansion plans are more bullish on a quarterly and annual basis (57% intended to expand capacity during Q4, 2016 and 65% during Q3, 2017 versus 6 for Q4, 2017). 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. Companies in the service sector are most optimistic about capacity expansion plans and technology upgrades. 73% of services versus 66% each of manufacturing and trading firms have capacity expansion plans. 76% of services versus 6 of manufacturing and 61% of traders expect to implement technology upgrades. SMEs are more confident than large firms about both investments in business expansion and technology upgrades. Intent to invest in capacity and upgrade technology is stronger among domestic-market oriented firms compared to exporters.

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