São Paulo – One third of medium-sized companies in Saudi Arabia expect to grow by at least 10%, and over half will hire additional staff this year. The numbers are from the EY Growth Barometer poll, which shows Saudi business owners more optimistic than last year regarding expansion.
Thirty-three percent of respondents of the poll by services company Ernst & Young see their businesses growing by over 10% this year, and 60% are expecting growth in the 6%-10% range. In the latter case, expectations are 26 percentage points higher than in 2017. Only six out of 2,700 respondents believe their revenue will decline – last year, 5% of respondents expected revenues to slide.
EY managing partner for Saudi Arabia Fahad Altoaimi said Saudi businesspersons are ambitious and confident about national plans Vision 2030 and National Transformation Program. The former is intended to increase the economic relevance of medium-sized businesses, among other things.
Altoaimi said respondents’ expectations surpass the International Monetary Fund’s 1.7% Gross Domestic Product (GDP) growth forecast for 2018. “One of the main goals in Vision 2030 was boosting the role of medium-sized companies in the economy, and this led to a boost in confidence,” he said.
National plans also include fostering innovation. Last year, 94% of respondents had said they wouldn’t embrace robotic automation. This year, 95% said they plan to do so within five years. They also said there’s a need for international expansion. Going global is a priority for 29% of respondents when it comes to corporate growth. Hiring full-time staff is in the plans for 58% of respondents.
Despite the good expectations, boas there are concerns over low cash flows – the biggest challenge to growth this year. About a third of those polled said they currently rely on bank credit, but are also seeking capital markets for funding, since the country’s bourse is being modernized. Three quarters are considering IPOs.
Tradução de Gabriel Pomerancblum
