JEDDAH: Overall business confidence in the Middle East has increased by over two points in Q2, the latest HSBC Gulf Cooperation Council (GCC) Business Confidence Index (BCI) report said Wednesday. This quarter, a rise in overall confidence has been matched by both a gain in the number of companies positive toward both investment budgets and hiring, suggesting that companies are in growth mode, it noted. Saudi Arabia led in return of the market confidence with 2.8 points increase. Bahrain managed to gain 2.1 points after a drop of 6.3 points in the previous wave due to the prevalent political situation. Alain Renaud, co-head of Global Banking, HSBC MENA, said: "Overall confidence across the GCC is up, but what is perhaps more interesting is the positive attitude we're seeing among respondents. Three in five of the companies surveyed believe that their organizations' performance will continue to improve and nearly 40 percent think that their customer numbers will increase overall." "This month – for the first time – we have also attempted to track the impact of the regional unrest on business confidence. The results are surprising. While 60 percent of respondents believe that the current political unrest will negatively impact their business, this has not impacted their access to credit – with 51 percent of respondents stating that their access to credit is the same as last year, and 40 percent claiming that the situation has improved," he added. He further said "businesses have stayed steady in overall performance over the last few quarters, and, more positively, companies are telling us that they are actually planning to hire." A clear trend is emerging, though. While many GCC companies expect trade with other Middle East countries to slow slightly, 44 percent of respondents expect trade with China to increase and 30 percent expect to increase trade with Asia Pacific, HSBC study also said. In another survey, top executives in Saudi Arabia, the UAE, and Qatar remain confident about business prospects in the region despite unrest elsewhere in the Middle East. Oliver Wyman/IBOPE Zogby International survey, which interviewed 160 leading executives in the GCC found that business confidence levels, which have improved steadily since 2009, have continued to rise. "One interesting aspect this quarter is that firms access to credit has not dipped. Credit supply is the lifeblood of many companies so this is a key measure of health, and a good indicator of future growth. The data tells us that 51 percent of companies believe they their firm's access to credit remains the same as last year, and 15 percent tell us that the situation has actually improved. This compares very favorably to the nine per cent who feel that this is getting worse."
