Most Gulf businesses are expecting to grow in 2016 despite a drop in oil prices, according to a report.
A survey by consultants Korn Ferry Hay Group suggests 65% of businesses in the Gulf Co-operation Council (GCC) region forecast revenue growth of 5% or higher. A third expect to grow by more than 15% while around 30% of businesses are expecting revenues in line with 2015.
Harish Bhatia, Korn Ferry Hay Group’s regional manager for productised services, said: “The current climate is prompting business leaders to focus on different priorities in 2016, with managing costs and improving profitability at the top of the list.”
More than 50% of businesses surveyed achieved their targets in 2015 while 16% exceeded expectations in the GCC countries of UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain.
Around 75% of those surveyed paid annual bonuses to employees for 2015. Two-thirds of companies in the oil and gas sector paid bonuses.
“However, many organisations are now utilising their variable limited bonus pool for the high performers selectively,” said the report.
Some 28% of respondents expected to focus on cutting costs in 2016, compared to 9% in 2015, while 22% would focus on improving profitability this year, compared to 17% in 2015.
Around a third of businesses are planning to increase their total workforce in 2016 while 71% are planning to increase salaries or allowances by between 4% and 6%. In the FMCG sector 90% expect to increase salaries.
The report named the United Arab Emirates as the GCC economy least reliant on oil and best placed to grow in 2016.
Just 5% of businesses in the Emirates are predicting a decrease in revenue.
Businesses in Saudi Arabia struggled the most in 2015 with 43% falling short of revenue targets. But 77% are predicting revenue growth above 5% in 2016.