The number of Middle East professionals reporting confidence in their businesses has grown from 26 per cent in late 2011 to 32 per cent in the first quarter of 2012, a global survey said.
Saudi Arabia and the UAE displayed a high level of business confidence, with 42 per cent and 38.5 per cent of respondents respectively reporting confidence gains, according to the latest edition of the Global Economic Conditions Survey conducted by ACCA (the Association of Chartered Certified Accountants) and the Institute of Management Accountants (IMA).
While both can rely on strong, sustainable government spending, Saudi Arabia also boasts the best performance of any major market in terms of new orders and investment, the report said.
Egypt, on the other hand, is a negative outlier, and is still reeling from the last year’s transition despite successfully holding elections in January.
This is the only major ACCA/IMA market to report a relative loss of confidence in early 2012. Only 24 per cent of respondents reported a confidence gain, compared to 30 per cent in late 2011.
The segment of professionals reporting confidence gains in their organisations on a global level has also nearly doubled from 16 per cent in late 2011 to 29 per cent in the first quarter of 2012, the survey said.
The global economy recovered substantially in early 2012 and regained some of the dynamism it had lost over the last year, it added.
The survey findings, representing the views of about 2,200 professional accountants around the world, indicated that while the majority (54 per cent) still believed the global economy was deteriorating or stagnating, that figure was down from 73 per cent in the previous quarter.
Emmanouil Schizas, editor of the ACCA/IMA Global Economic Conditions Survey, said: “When the results came in, we were a little skeptical and had to tick off all of the likely objections first. Much of the rise in confidence is being reversed as we speak, as the relief factor subsides, but a lot of it is here to stay.”
Confidence gains were fairly consistent across regions and industries, although the Americas and Western Europe seemed to benefit the most in early 2012, as did manufacturers and distributors, particularly in the high-tech sectors.
The survey reports increasing business dynamism, mostly in the Americas and Asia-Pacific, with businesses securing new orders where previously they would not have and responding with increased investment and hiring. ACCA and IMA have welcomed this development, noting that investment has been subdued at the global level since the end of the ‘green shoots’ stage of the global recovery which lasted from mid-2009 to mid-2010. Africa is still the most confident of the seven major regions covered by the survey, but it is clearly losing ground.
ACCA and IMA said that the bounce in investment is focusing on two kinds of opportunities in particular. Customer insights, namely the need to understand and benefit from spending decisions under new constraints, is one; the other is supply chain optimisation through deepening relationships and a stronger focus on quality.
The professional bodies also acknowledge the contribution of governments in their major markets, many of which showed signs of loosening their fiscal policies to boost a flagging recovery.
It is not clear how much longer they can afford to do so, as respondents generally continue to believe that many major economies, including both the US and China, are likely to spend unsustainably in the medium term.
On the other hand, finance professionals in Western Europe and other countries experiencing austerity also doubted the sustainability of their own governments’ fiscal policies.