Results of JETRO’s 2021 Survey on Business Conditions of Japanese Affiliated Companies in the Middle East

Mar 29, 2022

 

In September 2021, Japan External Trade Organization (JETRO) conducted its latest survey with regards to the current condition of business activities of Japanese affiliated companies in the Middle East. The survey was conducted in 10 countries: United Arab Emirates (UAE), Turkey, Saudi Arabia, Iran, Jordan, Israel, Kuwait, Qatar, Bahrain, and Oman. Valid responses of the survey were received from 230 companies.

 

Key Points: Japanese affiliated companies in the Middle East show a clear recovery in operating profits, - high interest in decarbonization in the Gulf states -

 

[Operating Profit Forecast/ Future Business Outlook]

In 2021, the percentage of companies expecting a profit increased to 65.2% in all countries, the highest level in the past five years and a significant increase of 20.1 points over the previous year. An increasing number of the companies expected a year-on-year increase due to a rebound from the previous year's decline and growth in sales caused by COVID-19.

 

As for the future business outlook, about 40% of the companies chose expansion, up by 7.0 points from the previous year. 75% of the companies cited sales increase of local markets as the reason for business expansion.

 

[Investment Environment in the Middle East]

About 50% of the respondents highly rated the market size and growth potential of the business environment in the Middle East. On the other hand, more than 50% of the companies considered the sudden introduction or a change in the system, and inadequate or unclear legal systems as challenges. In addition, many companies cited the unstable political and social situation in Iran, Israel and Turkey, and soaring real estate rents in the UAE and Israel as an important issues and concerns.

 

[Business Areas with Future Promise]

As for promising fields, the most common answer was resources and energy, followed by infrastructure, then consumer market, and others.

 

As for the resources and energy, renewable energy and decarbonization-related fields such as hydrogen and ammonia accounted a high percentage. Saudi Arabia and UAE ranked first and second, respectively, as countries of focus. Many companies cited decarbonization as the main reason of focus for these countries.

 

 

*For the complete details of the survey results, please click here.

*Report is also available at the Survey Reports Section of our Global website.