Dubai’s business confidence records a drop: While Dubai’s private sector is showing resilience in the face of global macro headwinds and inflationary pressures, its 1Q 2025 composite Business Confidence Index (BCI) of 114.9 points marks a notable drop from 125.5points in 4Q 2024 — as companies faced slower sales growth and rising cost pressures, according to the Dubai Business Survey report (pdf).

The service sector was the standout performer, posting a BCI of 123, bolstered by robust demand in tourism, hospitality, and digital services. Manufacturing firms were cautiously optimistic, with 109.8 points, though global supply chain constraints remain a concern. The trading sector, however, saw the sharpest deceleration, recording a BCI of 100.3, as businesses navigated tougher global trade dynamics and tighter margins. The export sector’s BCI rose to 116, up from 114.2 in 4Q 2024.

The tourism sector was formally tracked for the first time this quarter, with an initial BCI benchmark of 100.

Large enterprises outperformed the overall market with a BCI of 119, slightly ahead of the composite average and above SME levels, which maintained a BCI of 114.3. Profitability dropped into negative territory for SMEs, with -11% net balance.

No concerns for long-term confidence: The forecast for 2Q 2025 is a BCI of 154.8, which would be the highest score since the survey began to track business confidence in 2011. The survey cited a trend of growth and contraction over that time period to put the dip in 1Q into context.

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