The majority of companies in the UAE are going through challenges brought about by the coronavirus pandemic and are expected to make some operational changes to weather the crisis, according to HSBC.

In a new HSBC survey that covered more than 2,600 organisations in 14 countries, 79 per cent of firms surveyed in the UAE said they were “strongly impacted” by Covid-19. Only a small proportion (18 per cent) of UAE companies said they were sufficiently agile to survive the financial fallout, reported Zawya.

“The UAE was the second-highest market, after India, feeling the impact very strongly,” said the new HSBC Navigator report, entitled `Building Back Better’.

The virus that was first discovered in Wuhan, China and spread worldwide, infecting more than 14 million people, have decimated business revenues and resulted in millions of job losses. Last June, the International Monetary Fund (IMF) lowered its global growth forecast for the year to almost 5 per cent.

While the coronavirus continues to rage worldwide and the overall picture looks grim, HSBC’s survey findings indicated some degree of optimism.

Out of the 100 companies surveyed in the UAE, only 1 per cent feel that their long-term survival is threatened, while 51 per cent feel “strong overall” although they have had to make a number of adjustments. About 25 per cent also have been challenged but expect to survive, while only a small number (5 per cent) are significantly challenged and will need to transform to stay in business.

“There is a sense of optimism and entrepreneurialism which I think helps drive the country forward, as well as the support of the fiscal regime to encourage that growth. The UAE is [also] a very important source of foreign direct investment … There’s a lot of support from the US, China and Singapore for FDI inflows that’s going to continue to help the UAE going forward,” Daniel Howlett, HSBC’s regional head of commercial banking for Middle East, North Africa and Turkey (Menat), said in a media briefing.

HSBC’s survey was conducted between April 28 and May 12 this year and included small and medium enterprises (SMEs). Included in the survey were companies in Canada, Mexico, US, Australia, Hong Kong, India, Indonesia, mainland China, Malaysia, Singapore, France, Germany and the UK. When asked about the changes they intend to carry out, 72 per cent said they plan to increase measures to ensure the security of their supply chains over the next one to two years, compared to 67 per cent in all markets.

A third of UAE companies (32 per cent) are considering reviewing their supply chain partners’ ability to weather future uncertainty, while 30 per cent are considering diversifying their suppliers so they can work with more providers.