The Global Economic Conditions Survey gauges finance professionals views around the globe and has revealed that topping the list of business confidence worldwide during the first three months of 2013 was the Middle East.
The survey is of 2,000 global finance professionals that work in businesses of all sizes. It shows that in the Middle East 34% said they had become more confident over the upcoming prospects of their company, which was over 4.5% higher than in the fourth quarter of last year.
Reasons for the increased confidence in the region were an easing of demand pressures and cash flow compared to the levels they have been at over the last few quarters. In addition, growth capital is now more accessible and the investment opportunities are increasing significantly after a dip during the last six months of 2012.
However, the celebration, said economists, should not start quite yet. Inflation and the FX volatility are up over the last six months. More importantly, there has been a decline in business opportunities following what seems to be just a one-time surge during the last quarter of 2012, to roughly the same level as the beginning of 2012.
Because of that and despite an environment that has improved for investment, capacity building by local businesses slowed both during the first quarter of this year and year to year.
The survey said the UAE has become the most confident in the better represented market in the Middle East. There was a big improvement access to capital for growth during the last quarter of 2012, but because business opportunities are falling, too much capital could be chasing too few business opportunities in the near future.