MUSCAT: Executives interviewed for the 2019 edition of the Business Barometer: Gulf CEO Survey carried out by Oxford Business Group (OBG) remain largely upbeat about the outlook for the region, despite escalating tensions with Iran in recent months.

As part of its survey on the economy, the global research and advisory firm asked around 300 C-suite executives from across the region a wide-ranging series of face-to-face questions aimed at gauging business sentiment.

Almost three-quarters (72%) of those interviewed described their expectations of local business conditions as positive or very positive for the coming 12 months, up from 70.3% in OBG’s 2018 survey on the region.

Most of the business leaders surveyed reacted favourably to the level of transparency in place for conducting business relative to the region, with 71% describing it as high or very high. An even larger majority (80%) told OBG that they viewed the current tax environment (business and personal) as competitive or very competitive on a global scale. Obtaining financing remains problematic for some, however, with a more modest 53% describing the ease of access to credit in their market as easy or very easy.

Unsurprisingly, regional political volatility was by far the biggest business environment concern among executives, beyond movements in commodity prices. More than three-quarters (76%) identified it as the top external event they felt could impact the economy in the short to medium term, up from 71% last year and well ahead of China demand growth, which garnered 9% of responses.

Despite these worries however 63% of respondents said they thought it likely or very likely their firm would make an investment in the next 12 months, in a sign of the growing role that the private sector is playing in the regional economy.

Efforts to diversify national economies across the region, have inevitably revealed skills gaps across the labour market. Executives interviewed identified several areas in which skills were in high demand, including leadership, engineering, R&D and computech.

Commenting in his blog, Billy FitzHerbert, OBG’s Regional Editor for the Middle East, says despite facing hurdles which ranged from fluctuating oil prices to regional tensions, there is a definite sense amongst business leaders that the challenging economic circumstances were being successfully managed.

He writes that the private sector spending plans highlighted by the survey bode well for the region, and adds that “the broader challenge of generating higher levels of private sector activity in regional economies continues to guide policy.”

FitzHerbert adds that diversification away from a reliance on hydrocarbons remains the order of the day, and continues to sit at the centre of the series of development blueprints onto which Gulf countries have mapped future economic prosperity.

“Crucial now will be maintaining the initiatives put in place during more difficult times, ensuring efforts don’t backtrack and the inroads into curbing the mentality of public sector reliance do not diminish as regional economies look ahead and begin to regain firm economic footing.”

FitzHerbert’s in-depth evaluation of the survey’s results can be found on OBG’s Editor’s Blog, titled ‘Next Frontier’. All four of OBG’s regional managing editors use the platform to share their expert analysis of the latest developments taking place across the sectors of the 30+ high-growth markets covered by the company’s research.

The OBG Business Barometer: CEO Surveys features in the Group’s extensive portfolio of research tools. The full results of the survey on the GCC will be made available online and in print. Similar studies are also under way in the other markets in which OBG operates.

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