Dubai traders' expectations stay upbeat
But small traders are less optimistic than larger companies
While there had been no significant statistical change in traders’ expectations between 2007 and 2008 in Dubai, large traders who employ more than 20 workers appeared to be more optimistic than small traders with less than 10 workers. In addition, the machinery and industry inputs sector had a higher-than-the-average expectation score.
There observations were the results of a survey conducted by the Dubai Chamber in the fourth quarter of 2007 on 1,190 traders, of which 441 responded, on their expectations for the year 2008.
The results of the survey were recently revealed during the 2008 Economic Seminar hosted by the Dubai Chamber, which included the presentation of their study about inflation in the UAE, as well as that of a study made by the Center for Responsible Business (CRB), which marked the second annual survey of attitudes and practices of corporate social responsibility (CSR) in Dubai during the summer of 2007.
On the survey on traders’ expectations for 2008, the business sectors covered included vehicles, textiles, consumer goods, household goods, industry inputs, machinery and those in general trade. Sub-domains included employment size such as those with less than 10 employees (small), 10-19 employees (medium) and 20 and over employees (large).
According to Marietta Morada, senior research staff at Dubai Chamber, who made the presentation of the survey results on trader’s expectations for 2008, on a scale of one to 10 with 10 representing the best expectation, the traders’ expectations for 2008 was 6.6. this score represented a slight increase from 2007’s score of 6.5, but is considered to be statistically insignificant, according to Morada. The average score of traders’ expectations during the first two years of the annual survey in 2005 and 2006 was 6.9.
“Overall, I would say that the traders of Dubai are maintaining a favorable assessment of the entire trading sector,” Morada said.
Marked decline
With regards to the business sectors, the textile traders’ group appeared to have the lowest expectations of less than six. However, in terms of a statistically significant decline in the average score, the consumer goods sector fell from close to seven in 2007 to less than 6.5 in 2008 while household goods also showed a declining pattern from a high of 7.5 in 2006 to just slightly above six in 2008.
On the other hand, in terms of a rising expectation, the industry inputs sector and the machinery sector were the ones with the highest expectations for all the years of above seven in 2008 from above 6.5 in 2007.
As far as the size of traders in relation to the number of employees, those employing on to nine workers appeared to have a relatively stable expectation score but had the lowest at below 6.5. The medium-sized traders, with employees numbering between 11 to 20, declined slightly but maintained an above 6.5 score. On the other hand, large traders with more than 20 workers had the highest increase in their expectation score from seven in 2007 to above 6.5 in 2008. Exporters and the mixed trade sector remained stable at above 6.5.
In terms of the general market demand for their product, majority of the traders indicated that they have good expectations for the year. However, in 2008, the survey indicated a shift from good and very good to average.
“There is no downturn of expectation this year,” Morada observed. “It will just be maintenance of expectations from last year. The year 2008 is expected to be similar to the previous year.”
Citing the reasons for the traders continued positive outlook in 2008, population growth was the top reason at above 75 per cent. Other reasons included improving buying capacity of the population as the population of Dubai shifts into people with higher buying capacity, favorable preferences, and expectations of product prices to increase, expansion of product variety, no fear of competition, increasing outlets, increasing festivals and favorable trading regulations.
Negative outlook
On the other hand, those with a negative outlook cited reasons such as difficulty in supply procurement, rising process of goods for resale, declining product quality, declining buying capacity, unable to establish new stores and outlets, no new festivals and fairs, and perception that certain government rules are unfavorable.
For the traders’ sales expectation in 2008, the survey revealed a rising expectation to 56.7 this year, up from 54.2 in 2007.
On the issue of competitiveness of traders, while the 2007 expectations survey indicated that, it is in pricing where traders feel they are most competitive; traders have now shifted to other aspects of trading such as product quality, ease of purchase, inventory management, advertising and location.
With regards to the factors that trader feel are affecting or limiting their business potential, high property rentals and high operating costs remained as the top two factors in 2007 and 2008. However, while keen competitions were cited as the number three limiting factor in 2007, this has been replaced by high transport costs in 2008. The keen competition factor dropped to number five as the traffic situation remained the top foul limiting factor in 2007 and 2008.
Meanwhile, another study at the Dubai Chamber has found that world prices of imports currency depreciation, rents and money supply have been fuelling inflation it the UAE economy. The world commodity prices have been increasing during the last five years, the IMF world commodity price index has more than triple between the beginning of 2007 and the start of the second quarter of 2008.
Rising demand
Prices for energy, metals and agricultural goods have all risen as demand for commodities have increased in a growing world economy. At the same time, suppliers have remained relatively stagnant. The rising commodity price increase the supply costs for businesses and this follows through higher prices for consumers.
The UAE currency, the dirham, is pegged to the US Dollar in a fixed rate and the US Dollar has been depreciating against the world major currencies.
While there had been no significant statistical change in traders’ expectations between 2007 and 2008 in Dubai, large traders who employ more than 20 workers appeared to be more optimistic than small traders with less than 10 workers. In addition, the machinery and industry inputs sector had a higher-than-the-average expectation score.
There observations were the results of a survey conducted by the Dubai Chamber in the fourth quarter of 2007 on 1,190 traders, of which 441 responded, on their expectations for the year 2008.
The results of the survey were recently revealed during the 2008 Economic Seminar hosted by the Dubai Chamber, which included the presentation of their study about inflation in the UAE, as well as that of a study made by the Center for Responsible Business (CRB), which marked the second annual survey of attitudes and practices of corporate social responsibility (CSR) in Dubai during the summer of 2007.
On the survey on traders’ expectations for 2008, the business sectors covered included vehicles, textiles, consumer goods, household goods, industry inputs, machinery and those in general trade. Sub-domains included employment size such as those with less than 10 employees (small), 10-19 employees (medium) and 20 and over employees (large).
According to Marietta Morada, senior research staff at Dubai Chamber, who made the presentation of the survey results on trader’s expectations for 2008, on a scale of one to 10 with 10 representing the best expectation, the traders’ expectations for 2008 was 6.6. this score represented a slight increase from 2007’s score of 6.5, but is considered to be statistically insignificant, according to Morada. The average score of traders’ expectations during the first two years of the annual survey in 2005 and 2006 was 6.9.
“Overall, I would say that the traders of Dubai are maintaining a favorable assessment of the entire trading sector,” Morada said.
Marked decline
With regards to the business sectors, the textile traders’ group appeared to have the lowest expectations of less than six. However, in terms of a statistically significant decline in the average score, the consumer goods sector fell from close to seven in 2007 to less than 6.5 in 2008 while household goods also showed a declining pattern from a high of 7.5 in 2006 to just slightly above six in 2008.
On the other hand, in terms of a rising expectation, the industry inputs sector and the machinery sector were the ones with the highest expectations for all the years of above seven in 2008 from above 6.5 in 2007.
As far as the size of traders in relation to the number of employees, those employing on to nine workers appeared to have a relatively stable expectation score but had the lowest at below 6.5. The medium-sized traders, with employees numbering between 11 to 20, declined slightly but maintained an above 6.5 score. On the other hand, large traders with more than 20 workers had the highest increase in their expectation score from seven in 2007 to above 6.5 in 2008. Exporters and the mixed trade sector remained stable at above 6.5.
In terms of the general market demand for their product, majority of the traders indicated that they have good expectations for the year. However, in 2008, the survey indicated a shift from good and very good to average.
“There is no downturn of expectation this year,” Morada observed. “It will just be maintenance of expectations from last year. The year 2008 is expected to be similar to the previous year.”
Citing the reasons for the traders continued positive outlook in 2008, population growth was the top reason at above 75 per cent. Other reasons included improving buying capacity of the population as the population of Dubai shifts into people with higher buying capacity, favorable preferences, and expectations of product prices to increase, expansion of product variety, no fear of competition, increasing outlets, increasing festivals and favorable trading regulations.
Negative outlook
On the other hand, those with a negative outlook cited reasons such as difficulty in supply procurement, rising process of goods for resale, declining product quality, declining buying capacity, unable to establish new stores and outlets, no new festivals and fairs, and perception that certain government rules are unfavorable.
For the traders’ sales expectation in 2008, the survey revealed a rising expectation to 56.7 this year, up from 54.2 in 2007.
On the issue of competitiveness of traders, while the 2007 expectations survey indicated that, it is in pricing where traders feel they are most competitive; traders have now shifted to other aspects of trading such as product quality, ease of purchase, inventory management, advertising and location.
With regards to the factors that trader feel are affecting or limiting their business potential, high property rentals and high operating costs remained as the top two factors in 2007 and 2008. However, while keen competitions were cited as the number three limiting factor in 2007, this has been replaced by high transport costs in 2008. The keen competition factor dropped to number five as the traffic situation remained the top foul limiting factor in 2007 and 2008.
Meanwhile, another study at the Dubai Chamber has found that world prices of imports currency depreciation, rents and money supply have been fuelling inflation it the UAE economy. The world commodity prices have been increasing during the last five years, the IMF world commodity price index has more than triple between the beginning of 2007 and the start of the second quarter of 2008.
Rising demand
Prices for energy, metals and agricultural goods have all risen as demand for commodities have increased in a growing world economy. At the same time, suppliers have remained relatively stagnant. The rising commodity price increase the supply costs for businesses and this follows through higher prices for consumers.
The UAE currency, the dirham, is pegged to the US Dollar in a fixed rate and the US Dollar has been depreciating against the world major currencies.
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