MasterCard survey reveals consumer confidence in Kuwait is neutral for 2nd half of 2009
Consumer confidence in Kuwait is neutral for the second half of 2009. This is according to the latest MasterCard Worldwide Index of Consumer Confidence survey. While overall confidence is noticeably lower compared to the first half of 2009, results show that consumers in Kuwait are still optimistic about Regular Income and Employment for the six months ahead. In line with the latest Index, MasterCard has also announced the results of the MasterCard Worldwide Survey on Consumer Purchasing Priorities.
Now in its 5th year in the Middle East and Levant, the MasterCard Worldwide Index of Consumer Confidence is the region’s most comprehensive and longest running consumer confidence survey. Released twice a year, the Index is based on a survey which measures consumer confidence on prevailing expectations in the market for the next six months. It is calculated based on percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.
The latest survey was conducted from 23 March to 18 April 2009 and involved 2,600 consumers from 6 markets . Data collection was via personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The Index and its accompanying reports do not represent MasterCard financial performance.
In Kuwait, consumers are neutral [49.5] and are adopting a wait-and-see view about the next six months. The market’s Index score is less so than a period ago [96.6], a year ago [89.4] and the historical average [92.6]. The drop in consumer confidence is reflected mostly in the areas of Economy, which dropped to 45.2 from 95.9 a period ago, the Stock Market, which dropped to 25.4 from 93.0 a period ago and Quality of Life which dropped to 47.8 from 97.6 a period ago. Kuwaiti consumers’ confidence remains optimistic for Regular Income (70.0 vs. 98.0 a period ago) and Employment (59.1 vs. 98.6 a period ago), though less so than a period ago.
The MasterCard Worldwide Survey on Consumer Purchasing Priorities, also released twice a year, provides valuable insights into consumers’ savings and expenditure behavior and their discretionary spending priorities for the six months ahead. The survey is now in its second year in the Middle East and Levant.
“In Kuwait, while consumers are not bullish about the next six months, neither are they feeling pessimistic. This is encouraging given the economic challenges of today. In terms of their purchasing priorities, it is interesting that in Kuwait, dining and entertainment, personal travel and consumer electronics emerged as some of the most important priorities for consumers,” said Raghu Malhotra, area business head, Middle East (Gulf countries), MasterCard Worldwide.
Mr. Malhotra continued, “MasterCard is pleased to be consistently conducting these surveys as they underscore our commitment to be a credible source of knowledge for our customers, associates, and merchants as they develop their strategies for business success.”
In support of the MasterCard Worldwide Index of Consumer Confidence and MasterCard Worldwide Survey on Consumer Purchasing Priorities, a team of MasterCard executives briefed Kuwaiti customers on the survey results. The MasterCard team included Raghu Malhotra, Sumit Mittal, vice president and country manager, Kuwait, MasterCard Worldwide and Karen Hargreaves, vice president, Consumer Marketing & Corporate Communications, Middle East & Levant, MasterCard Worldwide.
MasterCard Worldwide Index of Consumer Confidence
The Index is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. Five economic factors are measured: Employment, the Economy, Regular Income, Stock Market and Quality of Life.
Consumer confidence in the Middle East and Levant is neutral at 49.9. The current Index is below the score from a period ago [72.7], a year ago [66.4] and the historical average [75.6].
• In the Middle East and Levant, all economic factors have declined compared to a period ago, especially the Stock Market which has dropped to 36.9 from 58.1 a period ago. However, the overall Index score for the Middle East and Levant [49.9] is higher than the Index score for Asia/Pacific [38.7].
• Consumer confidence in KSA [67.1], Qatar [71.4] and Lebanon [64.4] remains optimistic. However, current consumer sentiment in each market is lower than a period ago and, except for Lebanon, lower than the markets’ historical average.
• Egypt has moved from optimism in the previous Index [55.6] to pessimism [32.3] once again. Consumer sentiment about the next 6 months in both Cairo and Alexandria is pessimistic. Consumer sentiment has declined most sharply for Quality of Life (27.4 vs. 47.8 a period ago) in Cairo and the Stock Market (17.9 vs. 70.8 a period ago) in Alexandria.
• The Index scores for UAE (29.6 vs. 75.4 a period ago) and Kuwait (49.5 vs. 96.6 a period ago) have dropped noticeably. The overall decline is largely due to erosion of confidence in Regular Income (16.7 vs.91.6 a period ago) in the UAE and the Stock Market (25.4 vs. 93.0 a period ago) in Kuwait.
MasterCard Worldwide Survey on Consumer Purchasing Priorities
• Currently 23% of the consumers in Kuwait are spending 61–70% of their total annual income on household expenses.
• In the Middle East and Levant, 55% of the consumers plan to maintain the same level of discretionary/recreation spending as the last 6 months. In Kuwait 69% of the consumers plan to do the same.
• Across the Middle East and Levant, the top spending priorities are dining and entertainment (71%), fashion and accessories (49%), and consumer electronics (42%) in the next 6 months ahead. In Kuwait, the top spending priorities are dining and entertainment (86%), international personal air travel (71%) and consumer electronics (51%).
• Across the Middle East and Levant, 73% of the consumers intend to save for precautionary reasons compared to the 68% in Kuwait. In addition, in Kuwait, 24% of the consumers are planning to save between 21–30% of their total income in the next 6 months.