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Business Optimism Index Kuwait Q1 2010 Presented by Dun & Bradstreet South Asia Middle East Ltd (D&B) Muthanna Investment Company (MIC)

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Presentation on theme: "Business Optimism Index Kuwait Q1 2010 Presented by Dun & Bradstreet South Asia Middle East Ltd (D&B) Muthanna Investment Company (MIC)"— Presentation transcript:

1 Business Optimism Index Kuwait Q Presented by Dun & Bradstreet South Asia Middle East Ltd (D&B) Muthanna Investment Company (MIC)

2 Business Optimism Index The D&B Business Optimism Index is recognized world over as an indicator which ascertains the pulse of the business community Provides insight into the short-term outlook of businesses on sales, profit growth, investment etc Provides analysis of major trends, outlook and issues concerning businesses

3 Sample of business units representing Kuwait’s economy was selected 500 business owners and senior executives across business units were surveyed Survey conducted during December 2009 for the 1st quarter of 2010 Respondents are asked questions about their expectations on relevant business parameters Survey also captures respondent feedback on current business conditions Survey

4 World Economic Outlook Global economic recovery led by emerging markets such as India and China US economy expanded while Euro zone & UK posted negative growth, if at a lesser annual rate of decline Global Manufacturing PMI indicates renewed expansion across all major economies Real GDP Growth Q (yoy)Global Manufacturing PMI December 2009 Source: IMFSource: J P Morgan

5 Kuwait’s economy Source: IMF Kuwait’s GDP to register a growth rate of 3.2% after contracting by 1.6% in 2009; Non-oil GDP to grow at 4.1% in 2010 Recovery in the oil prices has helped Kuwait post a budget surplus of US$ 22 bn for the first eight months of the fiscal year Source: OPEC GDP Outlook

6 Business Optimism Indices : Q Five out of six business parameters in the non-hydrocarbon sector register improvement in Q1 Expectations particularly optimistic regarding New Orders Selling price outlook within the hydrocarbon sector improves after two quarters amidst higher oil prices

7 Business Optimism Indices Trend

8 Manufacturing sector Global Manufacturing PMI at 44 month high in December showing renewed expansion In Kuwait, average optimism levels roughly unchanged from previous quarter A majority of businesses foresee improved order book status during Q1 while 48% of companies expect higher profits 13% Global Manufacturing Purchasing Managers’ IndexManufacturing Sector GDP

9 Global construction sector currently driven by infrastructure spending as commercial property undergoes correction In Kuwait, optimism regarding New Orders, Level of Selling Prices, Number of Employees and Level of Stock parameters improve substantially in Q Construction sector Residential construction outlook Compound annual growth (%) Construction Sector

10 Trade, restaurants & hotels sector Global trade & hospitality sector is expected to pick up in 2010, but recovery will be slow as consumers confidence remains weak In Kuwait, the sales and profitability outlook has weakened in Q while order book expectations and hiring plans have firmed Trade, restaurants & hotels sector

11 Global transport & communications sector expected to witness gradual recovery in 2010 In Kuwait, expectations of higher sales lift profitability outlook Meanwhile, a surge in new orders is leading to increased hiring Transport & communications sector GDP

12 Finance, insurance, real estate & business services sector The Global Services PMI recovery has leveled out following extended recovery Kuwait’s service sector bullish about demand with increased optimism regarding Volume of Sales and New Orders Global Services Purchasing Managers' Index Finance & Business Services

13 Business Optimism Indices Trends : Hydrocarbon sector Half of the oil & gas respondents expect selling prices to improve in Q1 60% anticipate a rise in employee count Source: OPEC OPEC Monthly Basket PriceBusiness Optimism Indices

14 Other Key Highlights Availability of finance and direct costs cited as leading business concerns by the non-hydrocarbon sector 41% of the business units freeze investment outlays while 38% to invest in business expansion 45% of the business units in the non-hydrocarbon sector expect borrowing conditions to remain unchanged Project delays identified as the chief concern by 69% of the units in the hydrocarbon sector

15 Conclusion Business outlook for Q improves across all sectors with improved global economic condition Optimism in transport & communications sector stronger as international trade outlook is expected to improve further in 2010 Improving liquidity in the international financial markets lifts optimism levels in Finance & business services sector Hydrocarbon sector optimistic on the back of strong oil prices and improving demand conditions


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