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02 October 2023

96% of Sharjah firms optimistic

By Staff

Sharjah Chamber of Commerce and Industry in collaboration with Dun & Bradstreet today released the first Sharjah Chamber Business Confidence Survey, which found that in the first quarter of the year 96 per cent of businesses in the emirate expect the overall business situation to either improve or maintain its current level over the coming months.

The Sharjah Chamber Business Confidence Index stands at 137.6 points, indicating positive and rising sentiments amongst the business community. A score above 100 indicates positive business optimism.

The Sharjah Chamber Business Confidence Survey and its accompanying business confidence index are expected to become important tools for businesses and policy-makers in the Emirate as a predictor of short-term economic growth.

The Sharjah Chamber plans to repeat the survey, which was led by the Chamber’s Research and Studies Section.

“Sharjah businesspeople are optimistic about the immediate future, and that bodes well for growth in economic activity,” said Ahmed Mohammed Al Midfa, Chairman of the Sharjah Chamber. “The economy is growing strongly under the wise guidance of His Highness Sheikh Dr. Sultan bin Muhammad Al Qasimi, Ruler of Sharjah and member of the Supreme Council of the United Arab Emirates.

“While we are encouraged to see local businesses feeling optimistic, it is important for business leaders to remain responsive to the markets in which they operate and we would caution against confidence leading to complacency,” he said.

“We will use the results of the survey to guide Sharjah Chamber’s priorities over the coming months as well as sharing the survey with relevant Government departments.”

The positive investment outlook is supported by the recent high sovereign credit rating obtained by the Emirate of Sharjah. Large businesses believe that this achievement will help to raise the Emirate’s profile as an attractive investment destination and would have a positive impact on Sharjah’s business and economic environment.

In January, Standard & Poor's Ratings Services assigned an ‘A/A-1’ long and short-term foreign and local currency sovereign credit to the Emirate of Sharjah.

“Sharjah businesses can take heart from the results of the inaugural Sharjah Chamber Business Confidence Index,” said Hussain Mohamed Al Mahmoudi, Director General of Sharjah Chamber. “We will now study the results in detail and our member businesses can expect to see initiatives from Sharjah Chamber to further support in sectors that need our help.”

The Sharjah Chamber Business Confidence Survey found that over half (52 per cent) of businesses expect sales to increase and 37 per cent expected them to remain at their current levels. Just 11 per cent were anticipating a decline in sales.

Construction firms are the most optimistic, with 54 per cent expecting an increase in sales. The next most optimistic sectors were manufacturing (52 per cent) and trade& hospitality (51 per cent).

Optimism on sales activity was also reflected in profitability expectations. A significant 46% of all companies anticipate an increase in profits and another 34% expect profits to remain stable.

Some 64 per cent of businesses expect to invest to expand their capacity over the next 12 months, and 55 per cent are planning technology upgrades. A higher proportion of large firms are keen on investing in expansion compared to small and medium size enterprises (SMEs). Transportation and storage companies are most optimistic in terms of capacity expansion in the near term.

Manufacturing and Finance, real estate and business services firms are most upbeat about investments in upgrading technology. A comparison between Sharjah free-zone and mainland registered firms shows that former are more inclined on both capacity expansion and technology investments.

The outlook for employment in Sharjah is strong, with 38 per cent of businesses expecting to hire this quarter and 59 per cent expecting to maintain their current workforce levels, the first Sharjah Chamber Business Confidence Survey found.

Employment prospects are brightest in Construction and Finance, real estate and business services, all buoyant sectors in Sharjah.

Sharjah companies are on the whole not expecting significant price inflation in the coming period, with 59 per cent expecting no increase in selling prices.

Sharjah’s manufacturing sector is one of the most significant in the region, supported by 19 industrial zones and two thriving free zones. The economy is well-diversified, with no individual sector representing more than 20 per cent of GDP. Economic growth has been spread across a wide range of sectors.

The Sharjah Chamber Business Confidence Survey was conducted by Dun & Bradstreet South Asia Middle East, a leading business information and consultancy firm, and polled over 500 senior leaders in Sharjah businesses across all sectors.