Around 80 per cent of small and medium enterprises (SMEs) in the UAE are positive on growth outlook, despite seeing dips in payment collection and ability to raise finance during the next three months (Q3), a report said.

Around 71 per cent of SMEs said total orders received increased or significantly increased during the last quarter, while 16 per cent said they remained the same, according to the Q2 2015 UAE SME Sentiment Survey, conducted by Gulf Finance Corporation, a wholly-owned subsidiary of Shuaa Capital and a leading provider of finance to SME and micro businesses.

“The findings of the SME Sentiment Survey indicate a softening of the SME sector and are consistent with the trends we are currently seeing in the market,” said David Hunt, CEO of Gulf Finance.

“The slowdown can be attributed to macroeconomic issues having a dampening effect on general market conditions, which, coupled with the generally quieter summer months, has had an impact on the performance and sentiment of the SME sector as a whole. That said, it is encouraging to note that outlook on sales and growth for the next quarter remain positive, albeit not as bullish as in the beginning of the year.”   

Sixty-two per cent (Q1: 84 per cent) of SMEs are planning on increasing their headcount in the third quarter, with one in four planning on remaining the same. During the second quarter, 65 per cent increased their headcount as compared with 79 per cent in the previous quarter.

In respect to SMEs future plans, only 50 per cent (Q1: 63 per cent) of respondents are planning on expanding their product range whilst 37 per cent (Q1: 20 per cent) wish to expand into new territories, a quarterly like-for-like increase of 85 per cent.

Investment in infrastructure climbed 25 per cent on a quarterly basis to 26 per cent (Q1: 21 per cent) and respondents desire to open new outlets fell by a quarter to 15 per cent (Q1: 20 per cent). Employee benefits remained last with 17 per cent (Q1: 16 per cent) planning to invest in this area.

“It is most interesting to note that as companies have decided to hold back on hiring or expanding their product range, they have decided to use that money to invest in infrastructure and geographical expansion. It is indicative of SMEs ambitions that many are looking outside the UAE for their next phase of expansion and are investing to meet the expected demand,” Hunt added. – TradeArabia News Service