A total of 85 per cent of small and medium sized enterprises (SMEs) in the UAE have confirmed orders and production increased during the first quarter of the year, according to a report by Gulf Finance Corporation, a wholly-owned subsidiary of Shuaa Capital and a leading provider of finance to SMEs.

The inaugural UAE SME Sentiment Survey – Q1 2015 pointed out that three out of four business have increased headcount - 41 per cent by more than five people and a further 38 per cent added between one and five people.

About 70 per cent of SMEs saw a noticeable improvement in payment collection, specifically those with a turnover of between one to 10 million, it said.

As many as nine out of 10 claimed their ability to raise finance had markedly improved since the turn of the year.

The highest respondents were found to be those between 20 to 50 employees (27 per cent) or with a turnover of between two to five  million (31 per cent), suggesting that well established or high growth companies are the one benefitting.

David Hunt, chief executive officer of Gulf Finance, said: “These findings suggest that the UAE SME sector is feeling optimistic, an encouraging development given the importance placed on the sector by the government.

“The respondents have experienced markedly improved payment collections, a rise in orders and production, increased recruitment and considerably better access to finance.”

“The key takeaways are twofold; firstly an increase in confidence in the overall health of the UAE’s economy; and secondly, an increase in funding solutions to the sector as financing companies gain comfort in the fact that SMEs are witnessing a noticeable improvement in payment collection,” he said.

Meanwhile, about 93 per cent of respondents were either positive or very positive on their growth outlook.

Of those, one in four is employed at companies with 20 to 50 employees and 60 per cent.

About 90 per cent of the surveyed are expecting sales in their company to rise, with over one in two forecasting it to be between one and 20 per cent.

Regarding their future plans, 63 per cent of respondents said they are planning on expanding their product range, with the top two sectors being logistics and finance, while 20 per cent are planning to expand into new geographies.

“I found it interesting that employee benefits were at the bottom of the investment plans for SMEs. Only those established companies or those with small revenues but high growth potential see the value of investing in employee welfare and long-term incentive plans,” Hunt added. - TradeArabia News Service