Saturday 20 June 2009

Pause on economic escalator brings uncertainty

I don’t like those motion-activated escalators. You step on, but there is a split second before the machine starts to work, and you wonder briefly if it has broken down and you’ll have to get the legs working for the trudge upstairs. It’s usually only a fraction of a second before the sensors activate, the machinery kicks in, and you resume your effortless ascent, but I always find it disconcerting.

I’ve had a similar feeling for the past week about the financial and economic scene in the UAE, and especially Dubai. After all the “green-shoot” signals – stock markets soaring, oil above $70, property prices “bottoming out”, financial liquidity returning, world economic environment stabilising – my business brain was expecting continued upward and forward movement in the UAE. Now, just fleetingly, it has come over all confused and uncertain.

The signals have changed quite suddenly and subtly. Stock markets have had an incredible three-month period, adding more than 30 per cent to value in decent volumes and amid signs of resurgent foreign interest in the region. Then last week it all came off the boil.

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