By Marcus Leach

Recent political unrest in the Middle East and North Africa (MENA) is having wide reaching consequences for businesses across the world with the UK one of the European countries most affected, finds research announced today by Grant Thornton.

The Grant Thornton International Business Report, a quarterly survey of 2,700 medium to large privately held businesses across the world, reveals:

· Globally, more than a fifth (22 per cent) of medium to large privately owned companies say political unrest in the MENA region is having a negative impact on their business;

· Within Europe, businesses in Denmark (30 per cent) and Spain (29 per cent) claim to have been most affected, followed by the UK and Ireland (24 per cent in each market). North America was the region most affected overall with 26 per cent of businesses saying they had noted a negative impact, whilst Turkey was by far the country most affected (53 per cent);

· In the UK a quarter (24 per cent) of companies say they have seen a negative impact on business as a direct result of the conflict but a mere six per cent say this will prevent them from doing business with the MENA region in the future. This is lower than the worldwide average of 10 per cent.

· However, confidence in the region has declined significantly for a handful of the countries, some of which were the hardest hit by the Arab Spring such as Turkey (44 per cent less likely to do business in the future with the region), Vietnam (24 per cent) and the Philippines (22 per cent). In mainland China, where only 18 per cent of businesses felt negative impact from the unrest, a dip in business confidence for future trade with the region was also noted (22 per cent).

"Given historic growth rates and how well the MENA region recovered from the recession pre-Arab Spring, it's clearly an important place for businesses to be. However, businesses should not expect significant returns in the short-term," Scott Barnes, CEO Grant Thornton UK LLP said.

"UK businesses looking to invest in the region for the first time should carefully consider which market they choose as a launch pad. Focussing on the stable states in the Gulf is a good place to start, but for those prepared to take calculated risks there are many attractive pricing options in areas still affected by political unrest.

"A large majority of the Gulf states have committed to improving social welfare and as such are planning increased investment in infrastructure. Healthcare in particular is a key focus, though the regulatory environment is still a challenge."

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