Overall consumer confidence in Dubai remained robust during the second quarter of 2012, driven largely by a positive outlook on personal finance and strong optimism on job prospects, according to the quarterly consumer confidence index (CCI) published by the Department of Economic Development. Indicating that Dubai and its economy continues to invoke positive sentiment and trust among investors, CCI remained at a higher than average level of 122 percentage points during April-June 2012.
Personal finance showed to be on strong footing with 80% consumers positive in their outlook for the next 12 months, while 75% expressed optimism on their current financial situation. Improvement in current employment situation is also anticipated with 70% of the consumers confident of better job prospects over the next 12 months.
Within the private sector 71% of the employees are optimistic about job prospects and 78% are positive about their personal finance. Perceptions on the state of economy also showed a clear improvement during the second quarter of 2012 with 72% of the consumers expressing positive outlook for the next 12 months. Among government employees, 83% are optimistic about personal finances and 56% on the state of economy for the coming 12 months.
However, the state of economy continues to be the biggest consumer concern, with political stability in the Arab world and job security being the other major concerns in that order.
“The CCI is the result of quarterly consumer confidence surveys conducted among consumers to gauge their perceptions on local job prospects, personal finances and the suitability of making purchases, all over the next 12 months. The initiative aims to evaluate consumer impressions on the state of the economy and the key drivers of consumer behaviour,” said Omar Bushahab, CEO of the Commercial Compliance and Consumer Protection Division, DED.
“Studying consumer behaviour is essential to know the trends and patterns in buying, spending and saving; all of these provide a viable means to know the level of growth in the local market. Consumer confidence is evident from their spending without compromising on the financial stability or the goals they have set for the longer term,” added Bushahab.
Bushahab said although the CCI examines 15 ways of reducing the cost of living and rationalising expenditure among consumers, the most preferred means include cutting down on outdoor entertainment expenses, phone and energy bills (gas, electricity), annual vacations, as well as searching for better deals on home loans, insurance and credit cards.
The latest index showed a drop in the number of consumers who spend their reserves on holidays, new products, technology, home renovations, investment, loans or credit cards compared to Q1 of 2012. Almost 40% of consumers have committed their reserves to various activities. While 37% of consumers tend to spend their reserves on outdoor entertainment, 38% spend on buying new clothes, 31% on holidays, and 29% on new technology products.
Before joining SME Advisor, I worked as a producer/reporter for Forbes Media in New York. I obtained a Bachelor’s degree in Journalism and International Studies at the University of South Florida in the US. I am currently in Dubai working as Sub-Editor for SME Advisor Middle East, which is a business magazine published by CPI. You can follow me on Twitter: @joumanasaad or @SMEadvisorME and (Joumana Saad) or (SME Advisor) on LinkedIn.