Saudi SME's most confident globally
Saudi Arabia’s small and medium enterprises (SMEs) are the most confident about the growth prospects of the economy. Major findings of a survey conducted by HSBC, SABB’s global partner involving more than 6,389 enterprises in 21 key markets worldwide indicated that Saudi Arabia tops the global survey. Through the Global Small Business Confidence Monitor (SBCM), HSBC gauges the outlook of small businesses on local economic growth, capital investment plans and recruitment. In the study, respondents in Saudi Arabia have clearly expressed their intent to invest and expand their workforce in the next six months in light of the expected positive economic climate.
On the other hand, the findings show that confidence in future business growth among SMEs within emerging markets continues to increase, while levels in developed markets have dropped, according to HSBC’s bi-annual SBCM. Saudi Arabia emerged as the global leader in terms of SME business confidence, while overall Middle East respondents reported highest levels of confidence in the survey.
The biggest positive shift in business confidence on a regional level came from the Middle East and North Africa region (MENA) and on a country level came from Saudi Arabia. With 59 percent of MENA SMEs expecting their local economy to increase at a greater pace in the six months, confidence remains strong and continues to grow within the region.
The rise in oil prices has contributed to the increase in business confidence in the Middle East, with increases in wealth set to support private consumption and domestic demand. A recent HSBC Middle East Gulf Business Confidence Index showed that 36 percent of respondents saw increasing oil prices positively impacting their business.
Research findings show the number of SMEs across the globe conducting international business activities is expected to expand from 29 percent to 40 percent by 2013. The increase is driven by domestic SMEs, 18 percent of which plan to become international by 2013. International SMEs are demonstrating aggressive cross-border expansion plans with almost half (48 percent) intending to expand their international operations in the next two years to increase revenue.
The decline in confidence within the developed markets brought the overall global index down, while emerging markets indicated sustained growth and continued to hold a positive local economic outlook with almost half (43 percent) forecasting an increase in the growth of their local economy over the next six months.
In the developed markets only 12 percent predicted an increase in local economic growth over the next six months, while 26 percent predicted a decrease. Increases in recruitment and capital expenditure remain largely stable globally with33 percent of emerging market SMEs planning to increase their staffing versus 17 percent in developing markets and 48 percent planning to inject more into investmentsover the next six months versus 27 percent developing markets.