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Consumer confidence in Dubai remains steady

Consumer confidence remained steady in Dubai at 143 points in the second quarter, but job security continues to be the biggest concern followed by work/life balance, a quarterly survey conducted by the Department of Economic Development, or DED, shows.

“Positive sentiment is running deeper among consumers in Dubai with personal finances improving and more people are willing to put their spare cash into savings and holidays,” the DED said in a statement.

The local population seems to be more optimistic on the current state of the economy and personal finance compared to expats. The percentage of the consumers who believe that the economy will recover in next 12 months also slightly decreased to 74 per cent from 77 per cent, according to the survey, which gathers feedbacks from 2,000 respondents every quarter.

Earlier surveys by the DED show that investor confidence as well as business confidence in Dubai was on the rise. The DED has been recording steady increases in approved licenses this year compared to the previous year. Another survey by the DED held in the first quarter showed that the business community has been significantly more optimistic compared to the same period of the previous year. Optimism is especially high among manufacturing and services firms as new projects expected as a result of Expo 2020 are driving positive perceptions.

According to property consultants JLL, increasing tourist numbers have lifted investor confidence in the country’s hotel sector, particularly Dubai. Domestic developers and high net worth individuals form a large portion of investors, but there is also an increased appetite from global institutions and conglomerates, JLL said in a report.

The latest DED survey shows that rising rental and property prices and tourism boom are the causes of optimism for the next 12 months while “lack of job opportunities” and “not much increase in salary level” are the main concerns.

The outlook towards the state of personal finance in the next 12 months during the second quarter of 2014 is almost the same as the previous quarter. During this quarter, 92 per cent respondents are optimistic about the state of personal finance in the next 12 months, much like in the second quarter of 2013.

“The most notable pointer in consumer confidence levels seen in the last few quarters is stability gaining ground and optimism remaining unabated. With Dubai now maintaining a steady economic momentum and focus on sustainable growth, consumers and businesses will be able to plan in the longer term, without fear of volatility or instability,” said Omar Bushahab, chief executive officer, of the Commercial Compliance and Consumer Protection sector at the DED.

The Consumer Confidence Index for the second quarter of 2014 shows optimism prevailing for the fifth quarter in a row even when it remained at 143 points, the same as the previous quarter. Job security and salary levels remaining unchanged are concerns for a significant number of consumers but 81 per cent of the consumers rated current job prospects as excellent/good while 93 per cent see improvements in the next 12 months.

The survey shows that personal finance estimates are brighter with 81 per cent of consumers having a positive outlook currently and 92 per cent in the next 12 months. Apparently, more than half of the consumers are putting their spare cash into savings and holidays buoyed by the expectations of stable finances and 35 per cent of them are likely to make such spending in the next 12 months. The number of consumers who feel that this is a good time to buy things they want slightly increased during the second quarter, while around two-thirds feel that it is a good time to buy thing they need and want.

— issacjohn@khaleejtimes.com