Consumer Confidence Index at highest level since 2017, says Dubai Economy
The Q4 2020 Index of 142 points was way above the 133 points in the same period last year and 132 points recorded in Q3 2020
Consumers in Dubai are turning increasingly confident as the emirate started showing signs of a bounce-back in business activity, according to an official survey released on Tuesday.
Dubai Economy said the emirate, a much sought-after global business hub, saw its “Consumer Confidence Index” rising during the last quarter of 2020 to the highest level since the third quarter of 2017.
“The fourth quarter of 2020 Index of 142 points was way above the 133 points in the same period last year and 132 points recorded in the third quarter of 2020,” it said.
The rising consumer confidence was primarily due to expected improvements in personal finance conditions of Dubai residents. “During the last quarter of 2020 as many as 82 per cent of consumers were positive on the state of their personal finances over the next 12 months, compared to 79 per cent in the same period last year, and optimism was particularly high among 84 per cent of UAE citizens,” said Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection Sector in Dubai Economy.
Expectations of an improvement in economic conditions in Dubai over the next 12 months also remain high among consumers as 83 per cent in general and 97 per cent among UAE nationals expressed such optimism, according to the index that captures a consumer’s perceptions on the economy as well as intentions and expectations of buying and saving.
“The positive sentiment is further reflected in 85 per cent consumers looking forward to new job opportunities over the next 12 months. Economic initiatives and growth in economic activity that followed the reopening of the markets have strengthened the optimism on jobs,” Dubai economy said in a statement.
The bullish consumer sentiments resonate with the optimism voiced by business in the aftermath of the Covid-19 vaccine rollout and the reopening of the borders with Qatar.
The latest IHS Markit Dubai Purchasing Managers’ Index survey also reflects the upbeat mood among businesses hoping for a faster rebound in activities.
The PMI index, which is derived from individual diffusion indices that measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods, rose above the 50.0 no-change mark in December, posting 51.0 (from 49.0 in November) to indicate a modest expansion in the non-oil economy, and the first seen for three months.
David Owen, economist at IHS Markit, has said an increase in output and new orders led to a renewed improvement in the health of the Dubai non-oil sector in December.
According to a recent forecast by Dubai Economy, the emirate is expected to grow by four per cent in 2021 following a quick recovery due to effective policy measures introduced by the government to contain the pandemic.
The survey by Dubai Economy shows that overall, 74 per cent consumers feel the time is right to buy the things they need or want to buy, while the feeling is shared by 91 per cent of UAE nationals.
Among those consumers who expect to have money left after basic expenses 43 per cent said they would spend the balance on vacations while 36 per cent plan to save it for the future. Reducing outdoor entertainment to balance expenses and income is part of the plan for 54 per cent of consumers while 53 per cent intend to cut down on buying new clothes, 48 per cent would delay technology upgrades, and 39 per cent would reduce ordering food from outside.
UAE startups top in funding, deals led by ecommerce in 2020
The three main innovation hubs — the UAE, Egypt and Saudi Arabia — accounted for 68 per cent of total deals disclosed in 2020.
Lessons of 2020 indeed impart a new meaning to resilience as the startup community received a stronger government support in various forms of sops, with Mena startups raising over a record $1 billion of investment in 2020, indicating a 13 per cent increase year-over-year.
Roberto Croci, managing director of Microsoft for Startups MEA, said: “The UAE has all the ingredients to become a vibrant hub for start-ups, underpinned by effective public-private partnerships and fast regulatory decision-making. The UAE has long been synonymous with change and innovation. Much of this has been driven by SMEs and Startups, which are often at the forefront of fresh ideas – in many ways they can be considered the lifeblood of the UAE commercial spirit. Microsoft has long provided the infrastructure and tools to support their work.”
The three main innovation hubs — the UAE, Egypt and Saudi Arabia — accounted for 68 per cent of total deals disclosed in 2020 and once again, the UAE ranked first and accounted for the lion’s share of total funding and the highest number of deals in Mena, representing 56 per cent of all capital deployed across Mena (26 per cent), with 129 deals and $579 million in funding in 2020. Despite the challenges stemming from Covid-19, e-commerce and fintech, retained top spots by the number of deals, with the two sectors together representing 24 per cent of all deals in 2020. Similarly, the amount invested in healthcare startups more than tripled, increasing by +280 per cent to $72 million.
Sajid Azmi, founder and chief executive officer, Yegertek, said: “Pandemic induced restrictions accelerated the growth of e-commerce, but this should not be seen as a temporary transition. Not only has a much larger subset of customers become used to the convenience of e-commerce, the services on offers have also been enhanced. Add to this the inherent advantages e-commerce offers businesses in terms of market penetration, and it’s clear that growth in the sector will only accelerate.”
The Magnitt report ‘2021 Emerging Venture Markets Report’, released on Tuesday ranked Egypt second for both total funding with $179 million (up +31 per cent ) and number of deals (down -10 per cent) and fast-growing Saudi at third place for total funding with $152 million (up +55 per cent), with the number of deals seeing the highest increase in Mena, up by 35 per cent, which is made more remarkable when compared with the slow-down in the rest of Mena.
“2020 was a rollercoaster year that highlighted the importance of leveraging data to make opportunities visible across borders,” said Philip Bahoshy, Magnitt’s CEO. “Covid-19 rapidly accelerated the adoption of technology across emerging markets, creating larger markets and more opportunities to scale. By tracking and analysing startup investments in 19 countries and counting, we have been able to provide real-time intel to governments, founders and investors to support them in making informed decisions and policies,” added Bahoshy.
Magnitt’s latest report analyses and compares investments in technology startupscheadquartered in Mena, Pakistan, and Turkey, as the Dubai-based data platform expands its coverage beyond Mena and into emerging venture markets (EVMs). Last year, Pakistan recorded $77 million in 48 deals, and Turkey recorded $383 million in 140 deals.
Meanwhile, H.A.D Consultants and EMPWR are jointly organising ‘Empowering Minds’ a wellbeing and leadership event series. The startup community is certainly witnessing a spurt in mental health services and is gaining traction among businesses.
H.A.D Consultants is a team of three women — Hala Bou-Alwan, Amrika Bhogaita and Dalia El Kilany — who believe that empowering individuals has a snowball effect, leading to stronger, more resilient teams, businesses, communities and societies as a whole.
Ally Salama, CEO, EMPWR, said: “Traction and startup business in mental health means less stigma, and more marketing, education and awareness. The market now has more appetite for mental health services.”
Dubai Economy issues 42,640 new licenses in 2020
Dubai announced five stimulus packages to help Covid-affected businesses.
Dubai Economy on Tuesday announced that it registered a four per cent growth in new licences last year despite the Covid-19 pandemic and slowdown in the global economy.
Dubai’s Department of Economic Development, or Dubai Economy, said that it issued 42,640 new licences last year as against 40,891 new licences issued in 2019. It also recorded 15 per cent surge in licence renewals last year and said latest data reflects the resilience of the national economy.
According to a recent report of Dubai Economy’s Business Registration & Licensing (BRL) sector, 64 per cent of the new licences issued in 2020 were professional (27,307), 35 per cent were commercial (14,754) and the rest were distributed among tourism and industrial activities.
“The latest figures reflect the UAE’s and Dubai’s resilience as well as the emirate’s economic competitiveness, including its ability to provide businesses high-growth opportunities in various economic sectors,” Dubai Economy said.
Bur Dubai accounted for the largest share (22,276) of new licences followed by Deira (20,293), and Hatta (71). The top sub-regions were Al Khabaisi, Al Fahidi, Al Garhoud, Trade Centre 1, Burj Khalifa, Port Saeed, Oud Al Muteena 3, Oud Metha, and Hor Al Anz East.
Shailesh Dash, an entrepreneur and financier, said Dubai economy strengthened last year despite severe challenges posed by the Covid-19 pandemic. He said credit goes to the government’s and its visionary leaders who took timely measures to contain the damage from the Covid-19 crisis.
“Dubai announced five stimulus packages to help Covid-affected businesses, taking the overall value of business incentives introduced by the emirate’s government to Dh7.1 billion,” Dash said.
The figures demonstrate the UAE’s success in maintaining its growth and development momentum and reinforcing its position as a leading global economic and business destination. The increase in new licences also shows the private sector’s growing role as a key partner in Dubai’s economic development as well as the emirate’s constant efforts to provide a supportive environment and infrastructure for local and international businesses.
According to the report, 346,375 business registration and licensing transactions were completed in 2020, a growth of three per cent compared to 2019 (337,752). The figures highlight Dubai Economy’s vital role in providing value-added services to businesses in Dubai. The report also showed that Licence Renewals accounted for 162,762 transactions in 2020, a 15 per cent growth compared to 2019 (141,788).
“Dubai has done it again. Despite the challenging year affected by the pandemic, Dubai and its government departments have been very resilient and the various stimulus packages introduced by the government has proved to be a real boon for the businesses,” said Nazim Munshi, director at business consultancy Enterprise House.
She said professional and consultancy fields have shown more confidence.
“With the positive data of 2020 this year 2021 is expected to be even better. The business community has shown the trust they have in Dubai and UAE and such positive sentiment shall continue further with the opening up of opportunities in Qatar,” she said.
The growth validates the positive impact of the economic stimulus package launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, which allowed commercial licenses to be renewed without lease contracts.
Auto Renewal via text messages accounted for 92,576 transactions in 2020, a 36.5 per cent growth from 2019 (67,813). The number of Trade Name Reservations reached 51,170, Initial Approvals totalled 40,932, and Commercial Permits touched 10,680.
Highlighting the importance of collaboration between the government and private sectors, Dubai Economy noted that the private sector’s competitive and value-added projects play a key role in advancing the emirate’s economic development.
Dubai Economy strives to deliver solutions that contribute to enhancing ease of doing business in the emirate and expanding investment and growth, which in turn help create more new job opportunities and maintain a sustainable economy.
India witnessing V-shaped recovery since June: FinMin Report
India has been witnessing a ‘V-shaped’ recovery since June with the gradual easing of restrictions on economic activities, said a Finance Ministry report.
“The sustained improvement in high frequency indicators ignite optimism of an improved performance in second half of the year,” it said
The Monthly Economic Recovery for December by the Department of Economic Affairs (DEA) also noted that the impending vaccination is set to spur the momentum in economic activity globally.
“The effective management of Covid-19 spread despite the festive season and onset of winter season, combined with sustained improvement in high frequency indicators and V-shaped recovery along with easing of lockdown restrictions distinguish Indian economy as one riding against the Covid-wave,” it said.
The agricultural sector remains the bright spot of Indian economy, with healthy year-on-year growth of 2.9 per cent in rabi sowing, accelerating tractor sales, and reservoirs’ live storage at 122 per cent of decadal average.
“This rise in rural incomes is mirrored in the healthy, though moderated, sales in passenger vehicles, two and three wheelers and tractor, and a rebound in vehicle registrations for the first time after March 2020,” it added.
Further, the industrial production growth ran parallel to the festive fervour of October and rose to an eight-month high, led by manufacturing and electricity sector. The core industries registered slight decline in November driven by natural gas and cement, while coal production, electricity and fertilizers’ production registered growth.