Senior finance executives across the Middle East remain optimistic about the economy, the outlook for their companies and their investments for the future, despite economic uncertainty, according to the 2019 Global Business & Spending Outlook, a survey released by American Express Middle East and Institutional Investor Thought Leadership Studio.
The cross-industry findings in the joint study are based on a global survey of 901 CFOs and other senior finance executives of firms with annual revenues of $500m or more.
180 of these respondents are located across the Middle East region including Qatar, the United Arab Emirates, Saudi Arabia, Egypt and Bahrain. Now in its twelfth year, the survey was conducted in late November and December 2018.
Whilst senior executives suggest they are less likely to foresee economic growth in the region as they did last year (72 percent in 2019 vs 92 percent in 2018) due in part to lower oil prices, the growth outlook for the Middle East is in line with expectations worldwide.
71 percent of the total response base anticipates a substantial or modest expansion in their home countries.
Additionally, growth expectations within the region range from 67 percent of respondents from Bahrain expecting substantial or modest expansion, to a high of 77 percent in Egypt.
Only 10 percent of senior finance executives from the Middle East foresee a modest or substantial contraction in 2019.
Of the 72 percent who do expect to see growth in 2019, 45 percent anticipate modest expansion while 27 percent anticipate a substantial economic expansion.
The majority of executives saw their companies’ worldwide revenue rise in 2018 and the Middle East showed especially strong firm-level performance compared with Europe and Asia.
‘Despite operating in unsettled times, senior finance executives across the region are concentrating on their day-to-day business but keeping an eye on the future, said Mazin Khoury Chief Executive Officer, American Express Middle East.
‘While they balance spending to drive topline growth with profitability, they’re pressing ahead with expansion plans, which include pursuing foreign trade opportunities, hiring and investing in next-generation technology.
This year’s survey also highlighted that despite uncertainties around global trade issues, a majority (64 percent) of senior finance executives in the Middle East expected socioeconomic changes and global trade policy would strengthen their companies’ growth prospects in the near future.
Only 5 percent of senior executives think these issues will weaken growth prospects.
This view aligns with respondents globally, where 66 percent believe economic changes and global trade policy will strengthen their companies’ growth prospects.
Additionally, it was suggested that expanded foreign trade will be based more on organic strategies than partnerships, with companies most likely to set up or expand foreign operations (75 percent) and use online media for marketing programs (70 percent) to pursue international growth opportunities.
These company-controlled strategies are preferred consistently over local partnerships and alliances in foreign markets (58 percent) and produce/service localization (48 percent), a sign that a more nimble approach to foreign trade is taking hold in the Middle East.