Consumer confidence appears to still be rising in the UAE, following last quarter’s increase, according to the latest Consumer Confidence Index (CCI). The Consumer Confidence Index, a quarterly survey conducted by the Middle East’s number one job site Bayt.com in conjunction with research specialists YouGov Siraj, found the UAE increased by 2.2 points since last September.
Meanwhile, Bahrain and Qatar saw impressive increases of 10.4 and 9.4 points respectively. However, Lebanon recorded the largest decrease, moving down the index by an incredible 23.1 points. Lebanon has had a particularly unstable year with extreme lows and highs recorded each quarter. In North Africa, consumer confidence in Morocco and Egypt rose by 2.1 and 0.4 points respectively.
The Consumer Confidence Index (CCI) is a measure of consumer expectations and satisfaction of various elements of the economy including inflation, job opportunities and the cost of living.
As part of the CCI, respondents are asked questions about their personal financial circumstances and how they compare to the same period last year. Overall, 34% of the region’s respondents say their financial position is the same as last year and just over a quarter, 28%, say it has gotten better. In the UAE, 25% say they are better off than last year, 35% say they are in the same position as last year and 34% say they are in a worse position than last year.
Among the countries surveyed, 31% of respondents in Qatar and KSA say they are doing better than last year, followed by 30% in Oman, 28% in Kuwait and 21% in Bahrain. However in Jordan, only 17% felt their financial position is better than last year.
“The region seems to be stabilising as we are seeing that countries seem to have the same figures each quarter with the exception of Lebanon who has suffered political instability explaining the country’s highs and lows in terms of consumer confidence. This could mean that the worse of the crisis is indeed over for most of the Middle East,” commented Amer Zureikat, VP Sales, Bayt.com.
In addition to financial position, consumer confidence is assessed by asking the respondents about their level of optimism towards the future, which forms the Consumer Expectations Index (CEI). The countries varied widely in terms of their consumer expectations.
The largest decrease was once again seen in Lebanon, with a drop of 24.7 index points since the last quarter. The UAE recorded an increase of 4.4 points since the last quarter with Bahrain reporting the biggest increase, moving up the index by 10.9 points.
On the whole, respondents are expecting to be in a better financial position next year. Overall, 49% of respondents believe that their personal financial position will be better next year. By contrast, just 8% of the region’s respondents believe that their financial position will become worse. In the UAE, 50% of respondents believe that their personal finances will be better a year from now, compared to just 9% that believe they will become worse. Most optimistic that their personal financial position will be better in a year’s time are respondents in Oman with 58% confirming this statement.
Respondents also remain largely optimistic that their country’s economy will be better in a year’s time. Overall, 35% say that their country’s economy will be better, 20% say it will remain the same, and 26% say it will become worse. Respondents in Oman are the most positive about the expected improvements in their country’s economy, with 59% stating things will be better. Respondents in Egypt are most pessimistic about their country’s economy a year from now; 37% say that it will become worse. In the UAE, 47% of respondents believe that their country’s economy will be better in a year’s time, compared to just 14% that believe it will be worse.
Respondents were also asked what they feel their propensity to consume is, as part of the Propensity to Consume Index (PCI). Once again the UAE moved up this index by 3.4 points compared to the previous quarter. Qatar saw an impressive rise of 16.8 points. At the other end of the scale, Lebanon recorded the largest drop, moving down the index by an exceptional 22.8 points.
Asked whether they would invest in property, the respondents largely agree that they will not. The trend continues from the previous quarter with a majority of respondents (64%) stating they are not interested in making any investment in property. Within the UAE, 70% say they will not be buying any property. Of those wishing to purchase a property, 68% say they are likely to opt for a new property.
“Gauging consumer opinion is a powerful tool for revealing the current attitudes and sentiments about the business and economic conditions in a specific country and to see how these change overtime,” commented Sundip Chahal, Chief Operating Officer of YouGov Siraj.
Another contributor to the CCI is the Employee Confidence Index (ECI), which measures the attitudes of respondents to the local job market, in terms of their satisfaction towards the availability of jobs and their satisfaction with their salary.
The UAE saw a rise of 3.4 index points versus the previous quarter on this measure. Showing the biggest decrease is once again Lebanon, which moved down the index by 13.3points. The most impressive rise was recorded once again by Bahrain which moved up 9.3 points.
When asked whether they believe more jobs will be available in a year’s time, respondents are roughly divided: 26% say more will be available, 27% say the job situation will remain the same and 30% say the availability of jobs will be worse. In the UAE, 36% believe the availability of jobs will get better while 22% of respondents believe the availability of jobs will become worse.
In terms of salaries and whether they have kept pace with the cost of living, as in the previous wave, the majority feel that they have not kept pace with the cost of living, with 63% agreeing that there is a disparity, while just 19% agree they have increased inline with the cost of living, and 5% say they have increased more than the cost of living.
“Our quarterly consumer confidence survey provides a strong indication, each quarter, as to how people living in countries across the region view their current economic situation, and how they believe it will change in the future. By conducting this survey, we are really aiming to achieve an honest and representative overview of current sentiments and feelings about various elements of the economy, so these can be used proactively and for positive effect by organisations and HR stakeholders around the Middle East,” concluded Zureikat.
Data for the December 2010 Consumer Confidence Index Survey was collected online between 15 November and 16 December 2010 with 10,468 respondents from the UAE, KSA, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan. Males and females aged over 18 years old, of all nationalities, were included in the survey.