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UAE Consumer Confidence Soars 187pc
DUBAI - Consumers in the UAE are increasingly bullish about the first half of 2010 with their confidence recording a dramatic 187 per cent surge on an index published by MasterCard on Wednesday.
The UAE has seen a quick turnaround compared to all other Middle East and Levant market scores, said Raghu Malhotra, MasterCard’s area business head for the Middle East and Gulf Countries. “Confidence level in the UAE registered the largest index score increase to 86 from 30 posted in the last survey six months ago,” he said.
“Consumer confidence in the UAE has significantly increased and consumers appear optimistic about the future,” said Malhotra.
“In the UAE, the top spending priorities are dining and entertainment (46 per cent), buying or renovating home or property (37 46 per cent) and fashion and accessories (30 46 per cent).”
In addition, in the UAE, 24 per cent of the consumers are planning to save between 11–20 per cent of their total income in the next six months.
The survey reveals that currently 17 per cent of the consumers in the UAE are spending 71–80 per cent of their total annual income on household expenses.
Similar upbeat consumer sentiments were echoed in another survey conducted by the Dubai-based Echo Trends. Out of 400 Dubai residents in the survey, 58.8 per cent said they have not reduced their spending on groceries in 2009.
“But 53.6 per cent said they have cut down on leisure activities related expenses as compared to 64 per cent who have not cut down on personal travel last year, reflecting a positive period for the airline sectors,” said Echo Trends’ Consumer Behaviour and Trends Report.
“Dubai residents’ behaviour and trends have not changed drastically despite the economic downturn,” said Samer Renno, Chief Executive Officer of Renno Communications Group, the parent company of Echo Trends.
The Mastercard index, released twice a year, is based on a survey that measures consumer confidence on prevailing expectations in the market for the next six months based on several economic indicators. The index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.
The latest survey was conducted in October and November 2009 and involved 2,400 consumers from six markets in the Middle East and Levant.
However, the survey, according to Mastercard, was conducted prior to news of Dubai World’s debt announcement, adding that it could not say what impact that might have on the figures.
The five economic indicators that make up the overall index score reflected the rise in optimism.
Most people surveyed in the UAE were optimistic about stock markets with confidence reaching 89.6 from 31.3 six months ago. Confidence levels in other sectors as follows: economy (89.4 vs. 35.5 a period ago) employment (86.0 vs. 27.8 a period ago), quality of life (83.7 vs. 36.7 a period ago) and regular income (81.9 vs. 16.7 a period ago).
Across the Middle East and Levant, 58 per cent of the consumers plan to maintain the same level of discretionary/recreation spending as in the last six months. In the UAE itself, 59 per cent of the consumers plan to do the same.
In the GCC, consumer confidence was the highest in Qatar at 89.2. Saudi Arabia was up at 83.2. In Kuwait, consumer confidence has moved from 49.5 a period ago to 70.9.
Across the Middle East and Levant, the top spending priorities are dining and entertainment (52 per cent), fashion and accessories (47 per cent), and buying or renovating home or property (38 per cent) in the next 6 months ahead. About 70 per cent of the consumers intend to save for precautionary reasons compared to the 74 per cent in the UAE alone.
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