Gulf Finance reports softer quarterly growth and sales outlook for the UAE's SME sector

Dubai, 3rd September, 2015 (WAM) - Gulf Finance Corporation, a wholly-owned subsidiary of SHUAA Capital and provider of finance to SME and micro businesses, yesterday announced the results of the Q2 2015 UAE SME Sentiment Survey. Review – Q2 vs. Q1 2015 Sentiment on sales and growth outlook for next 3 months is less positive Decline in total orders received Ability to collect payments and to raise financing has decreased One in four less inclined to hire on a forward looking quarterly basis Priorities for Q3 are expansion into new geographies and investment in new infrastructure "The findings of the SME Sentiment Survey indicate a softening of the SME sector and are consistent with the trends we are currently seeing in the market," commented David Hunt, CEO of Gulf Finance. "The slowdown can be attributed to macroeconomic issues having a dampening effect on general market conditions, which, coupled with the generally quieter summer months, has had an impact on the performance and sentiment of the SME sector as a whole. That said, it is encouraging to note that outlook on sales and growth for the next quarter remain positive, albeit not as bullish as in the beginning of the year." 71% of respondents interviewed during the second quarter (Q1: 84%) confirmed total orders received increased or significantly increased during the last quarter, whilst 16% (Q1: 10%) said they remained the same. 1 in 8 (Q1: 1 in 9) of those surveyed had a positive or very positive growth and sales outlook, despite seeing a dip in improvement in payment collection to 61% (Q1: 69%) and ability to raise finance to 63% (Q1: 78%). 62% (Q1: 84%) of SMEs are planning on increasing their headcount in the third quarter, with one in four planning on remaining the same. During the second quarter, 65% increased their headcount as compared with 79% in the previous quarter. In respect to SMEs future plans, only 50% (Q1: 63%) of respondents are planning on expanding their product range whilst 37% (Q1: 20%) wish to expand into new territories, a quarterly like-for-like increase of 85%. Investment in infrastructure climbed 25% on a quarterly basis to 26% (Q1: 21%) and respondents desire to open new outlets fell by a quarter to 15% (Q1: 20%). Employee benefits remained last with 17% (Q1: 165) planning to invest in this area. David Hunt added: "It is most interesting to note that as companies have decided to hold back on hiring or expanding their product range, they have decided to use that money to invest in infrastructure and geographical expansion. It is indicative of SMEs ambitions that many are looking outside the UAE for their next phase of expansion and are investing to meet the expected demand." – Emirates News Agency, WAM - http://www.wam.ae/en/news/economics/1395284967397.html