Propelled by increased economic activity, consumer confidence in Dubai surged to its highest level in 10 years during the third quarter of 2021, the Consumer Confidence Index tracked by Dubai Economy showed.
During July-August 2021 the Index rose two points from the previous quarter and 21 points compared to the same quarter of 2020.
Faizal Kottikollon, chairman of KEF Holdings, said the latest survey aligns with the bullish findings of the recent business confidence survey conducted by the Dubai Chamber of Commerce and Industry. The chamber study shows that confidence among Dubai businesses reached its highest level in 10 years, fuelled by improved business activity with the beginning of the world’s largest event Expo 2020. The chamber’s survey results revealed that 76 per cent of companies noted improved business confidence in the fourth quarter of 2021 compared to 66 per cent in the third quarter. 78 per cent of businesses hope Expo 2020 to benefit their businesses in the coming months.
“An amazing confluence of positive development, including the Expo 2020 Dubai, the successful vaccination drive, the opening of borders, the buoyancy in the real estate sector, Dubai’s future-readiness and above all the abiding global investor confidence in Dubai’s future, has been driving the confidence levels of the consumers,” said Kottikollon.
Dubai’s rebounding real estate is yet another testimony to the new found buoyancy in the emirate’s overall recovery from the pandemic. Demand for property from overseas investors has been surging consistently along with a steady increase in prices.
Dubai Economy’s quarterly Consumer Confidence Index measures current and future sentiment of consumers towards the state of economy, job prospects locally, personal finances and consumers’ perception on whether it is a good time to buy things they need or want.
The Q3 2021 Index showed that 73 per cent of consumers were positive about current job prospects, compared to 46 per cent in the same quarter of the previous year. A higher share of consumers (88 per cent) was optimistic about job prospects in the next 12 months, compared to 77 per cent in Q3 2020. Europeans and Americans were the most optimistic (88 per cent) on current job prospects while Emiratis were the most optimistic (93 per cent) on job prospects in the next 12 months.
Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection Sector in Dubai Economy, said the latest Consumer Confidence Index reflects an unprecedented level of positive sentiment towards the state of economy and how Dubai successfully overcame the global economic challenges related to Covid-19 by reactivating the economic activity. “”A clear proof of this optimism is 86 per cent consumers believing that their current personal finances are good compared to 72 per cent in the same period of last year.``
Lootah said 82 per cent of consumers consider it a good time to buy things they want or need augur well for consumer spending and economic growth locally. “The share of consumers who were positive about the state of the economy during the third quarter of this year has grown to 78 per cent from 57 per cent during the same period last year. Meanwhile, the third quarter Consumer Confidence Index also indicates positive sentiment prevailing among 85 per cent on the state of economy for the next 12 months, compared to 72 per cent in the same quarter of 2020.”
The study shows that 82 per cent of Emiratis and 81 per cent business owners from different nationalities believe that the current state of economy is good, while 95 per cent of public sector employees and 87 per cent of males who participated in the study believe that the state of economy in the next 12 months will be good. “Increase in tourism, growth in business, and rise in promotional campaigns are the main factors driving positive sentiment in Dubai,” Lootah said.
The Index showed that 44 per cent of consumers plan to spend their spare cash on vacations, 36 per cent of them on outdoor entertainment, and 33 per cent, on new clothes. The Index also showed that 51 per cent consumers are likely to spend less on buying new clothes, while 39 per cent plan to cut down on short and 38 per cent on outdoor entertainment as measures to stay within budget.