'Business confidence is very high,' says Martin Amison of Trowers & Hamlin. 'And it has been a very short summer - there hasn't been much of a tail-off in activity, and there is unlikely to be in the foreseeable future. I've never seen Bahrain buzzing as it is now, the UAE is extraordinary and in Saudi Arabia there is a huge amount of work going on in petrochemicals, and lots of private equity funds are starting up to invest in the power and energy sectors. Notwithstanding oil production below the norm, Oman is doing well too, topping up the state reserve fund and announcing a number of major projects.'

Three-quarters of MEBCI respondents expect year-on-year growth in net profits in 2005 to exceed 5 per cent, including 28 per cent who believe the increase will be in excess of 15 per cent. Similarly, 74 per cent of those surveyed expected 2005 revenues to be at least 5 per cent higher than those for 2004, with 35 per cent expecting growth of more than 15 per cent. Strikingly, 40 per cent of respondents in the construction sector expect turnover to increase by more than 15 per cent. Companies with a turnover of more than $100 million a year expect the greatest rises, with almost half forecasting 2005 growth in excess of 15 per cent and 87 per cent expecting a rise of more than 5 per cent.

Respondents were also confident of continued high oil prices. In terms of their importance as a driver of economic change, crude costs scored an average of eight out of 10 among those surveyed. Only 11 per cent of respondents thought that oil prices would fall below $50 a barrel in the next six months, with 37 per cent expecting prices to remain above that level for more than a year.

'Oil demand around the world is increasing,' says a banker at Saudi Hollandi Bank. 'So I think it is unlikely that prices will fall back to $30 a barrel. I see them settling at around $40-45 a barrel in about six months, and staying above $40 for the foreseeable future.'

'I expect the 2005 average price for Brent crude to be around $52,' says a regional economist. 'It could fall to the mid-$40s in 2006 if demand slows as some analysts predict. Beyond that, the downsideprice scenario is certainly not as likely as the upside scenario or the status quo.'