According to the latest Global Economic Conditions Survey (GECS), produced by ACCA (the Association of Chartered Certified Accountants) and IMA (the Institute of Management Accountants), business confidence across the United Arab Emirates (UAE) fell to its lowest level since the first quarter of 2016.
Lindsay Degouve de Nuncques, head of ACCA Middle East said “In the UAE, the capital expenditure and employment subcomponents were both very weak. Despite the UAE has one of the biggest non-oil sectors in the Gulf, this will be related to the lower oil price.
“Oil output is likely to remain subdued as countries in the Middle East follow the latest OPEC production cuts. The other drag is likely to come from continued fiscal austerity, as the region continues its adjustment to a period of lower oil prices. If that oil price remains relatively stable, the UAE’s confidence levels may start to recover in the coming months. Our fiscal position is relatively strong, and it is significant that the government expenditure sub-component remains in positive territory. Preparations for the 2020 World Expo should also help to support the UAE’s economic prospects.”
Global economic confidence improved slightly in the third quarter and remains high compared with the past couple of years.
“This quarter’s GECS suggests that the global economy is enjoying a strong recovery. While the global picture is optimistic, however, it does hide variations, with some regions doing much better than others,” said Narayanan Vaidyanathan, senior business analyst at ACCA.
South Asia was the most confident region in this quarter’s GECS, with the region’s two biggest economies, India and Pakistan, set to grow strongly over the next year.
“Economic confidence across Asia-Pacific is also strong, reaching a record high after three consecutive quarterly increases. The recovery in global demand and subsequent improvement in export prospects has created the fastest local levels of growth in several years,” added Vaidyanathan.
However, the survey paints a different picture in the US, where business confidence has fallen for the second consecutive quarter.
Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy commented: “This quarter, the number of people feeling less confident about the future exceeded those feeling more confident. This is the first time we’ve seen this since Q3 of 2016. The drop comes as the U.S. administration continues to deal with challenges in pushing through healthcare reform, tax cuts, and increases in infrastructure spending.”
Canada has been the most optimistic part of the North America and Caribbean region over this last quarter.
Fieldwork for the Q3 2017 GECS took place between September 1 and 18, 2017 and attracted 1,277 responses from ACCA and IMA members around the world, including more than 114 CFOs.
The full GECS report is available here.