A positive outlook from Middle Eastern business is at last being matched by real results, according to the latest edition of the Regus Business Confidence Index, which is based on the opinion of over 17,000 companies from around the world.
Business confidence has grown since 2010, but is now accompanied in the Middle East by reports that revenues and profits are increasing in line with expectations expressed in last year’s Index. The research also reveals that departmental spending is on the rise, specifically sales and marketing costs but not those related to premises and property.
The Regus Business Confidence Index, now in its fourth edition, stands at 125 points, an all-time high as the index is up 31 points on its lowest trough in April 2010 and 25 since October 2009 when the survey began.
In the Middle East the index reveals an above average rating of 144 and over half or54% of Middle Eastern companies report healthy profit growth as well as 59% a rise in revenues.
Departmental spending is predicted to rise this year, with the exception of property where companies are maintaining a strict cost control policy. Globally, 81% of companies expect to freeze or cut their property spending and in the Middle East even more companies or 87% expect to follow suit. This matches other research studies which reveal a general trend towards lower cost working practices.1
“That Business Confidence is returning is great news as is the fact that so many companies are reporting rising revenues and profit. Planned departmental spending increases for 2011 are further confirmation of returning confidence. However it would seem that firms are only investing where there is a clear bottom line return, such as sales and marketing, whereas spending on property will continue to decline in 2011. This is a remarkable change on just a few years ago, when the combination of economic upturn and increasing employment would have generated a boom in traditional commercial property spending. However, having been left exposed in the recession businesses now prefer to minimize risk and opt for more flexible and scalable arrangements,” Regus spokesperson said.