The virus that was first discovered in Wuhan, China and spread worldwide, infecting more than 14 million people, have decimated business revenues and resulted in millions of job losses.
Last June, the International Monetary Fund (IMF) lowered its global growth forecast for the year to almost 5 percent, worse than its prediction in April.
While the coronavirus continues to rage worldwide and the overall picture looks grim, HSBC’s survey findings indicated some degree of optimism.
Out of the 100 companies surveyed in the UAE, only 1 percent feel that their long-term survival is threatened, while 51 percent feel “strong overall” although they have had to make a number of adjustments.
About 25 percent also have been challenged but expect to survive, while only a small number (5 percent) are significantly challenged and will need to transform to stay in business.
“There is a sense of optimism and entrepreneurialism which I think helps drive the country forward, as well as the support of the fiscal regime to encourage that growth. The UAE is [also] a very important source of foreign direct investment (FDI)… There’s a lot of support from the United States, China and Singapore for FDI inflows that’s going to continue to help the UAE going forward,” Daniel Howlett, HSBC’s regional head of commercial banking for Middle East, North Africa and Turkey (MENAT), said in a media briefing.
HSBC’s survey was conducted between April 28 and May 12 this year and included small and medium enterprises (SMEs). Included in the survey were companies in Canada, Mexico, United States, Australia, Hong Kong, India, Indonesia, mainland China, Malaysia, Singapore, France, Germany and United Kingdom.
When asked about the changes they intend to carry out, 72 percent said they plan to increase measures to ensure the security of their supply chains over the next one to two years, compared to 67 percent in all markets.
Approximately a third of UAE companies (32 percent) are considering reviewing their supply chain partners’ ability to weather future uncertainty, while 30 percent are considering diversifying their suppliers so they can work with more providers.
Many companies in the UAE (64 percent) also said they plan to invest in technology to improve how they work, while 95 percent agreed on the need to reassess their operations to be built on firmer environmental foundations.
(Reporting by Cleofe Maceda; Editing by Mily Chakrabarty)
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