Consumers in the UAE have indicated that they are highly optimistic about the coming 6 months, according to the results of the latest MasterCard Worldwide Index of Consumer Confidence. Consumer confidence in the UAE is at a record high, with a score of 95.6 showing significant improvement from six months ago (73.6), a year ago (82.4) and even 18 months ago (86.1). In fact, the latest consumer confidence score for the UAE is the highest that it has been since 2004 and is significantly higher than markets such as China (78.3), Hong Kong (69.9) and India (75.2).
Now in its 19th year, the MasterCard Worldwide Index of Consumer Confidence is the region’s most comprehensive and longest running consumer confidence survey. The Index is based on a survey which measures consumer confidence on prevailing expectations in the market for the next six months based on five economic indicators: Economy, Employment, Stock Market, Regular Income and Quality of Life. The Index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.
The latest survey was conducted from March to April 2011 and involved 17,620 consumers from 25 markets. Data collection was via internet surveys, 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.
UAE consumers are most optimistic about the Economy (96.2) and Regular Income (96.1) and least optimistic about Employment (94.7). However, all indicators of consumer confidence were rated as being exceptionally positive, including Quality of Life (95.7) and the Stock Market (95.4).
The survey also revealed that male consumers in the UAE tend to be more optimistic about their prospects for the coming months as compared to female consumers (97.2 vs 93.6), and that those under thirty years of age tend to be more positive than consumers over the age of thirty (98.2 vs 93.5). However, it is worth noting that confidence levels for all gender and age demographics remain above 90.
“It is very encouraging to see that UAE consumer sentiment is continuing its upward momentum and is expected to reach a record high in the coming months. The findings are in line with the recent trends that we have observed in the market with retail, travel and hospitality sectors, in particular, registering a significant upturn. The MasterCard survey provides further good news for the UAE business community,” said Raghu Malhotra, general manager, Middle East, MasterCard Worldwide.
Overall, in the Middle East, consumer confidence has gone up significantly compared to six months ago (83.4 vs 71.6). Respondents were most optimistic about Regular Income (86.8 vs 83.0 six months ago) and least optimistic about the Stock Market, even though the latter indicator has increased drastically in the last six months (81.5 vs 63.2). In fact, all five economic indicators have increased in the Middle East compared to six months ago. The Middle East’s aggregate score of 83.4 is also substantially higher than that of Asia/ Pacific (61.5) and Africa (73.8).
MasterCard Worldwide Index of Consumer Confidence
Amongst other findings in the Middle East:
Consumer Confidence is highest in Oman with a remarkable score of 99.0. It is worth nothing that this is the first time Oman is being included in the survey, so there are no previous comparable scores.
The Kingdom of Saudi Arabia (the highest scoring market in the survey six months ago with a score of 95.1) further increased its score to 98.6.
All markets surveyed across the Middle East reflected increased levels of Consumer Confidence with the exception of Lebanon, for which the score fell from 54.3 six months ago to 15.0 in the current survey.
About the MasterCard Worldwide Index of Consumer Confidence
The MasterCard Worldwide Index of Consumer Confidence survey has a 19-year track record of consumer confidence indices collected from over 200,000 interviews, unequalled both in scope and history across Asia/Pacific.
The MasterCard Worldwide Index of Consumer Confidence is the most comprehensive and longest running survey of its kind in the region. In June 1997, the Index revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional economic crisis. In June 2003, the Index score for Employment in Hong Kong dropped to a low of 20.0. This was subsequently reflected in Hong Kong’s unemployment rate, which peaked just before September 2003 at eight percent.
The survey comprising the Asia/Pacific markets began in the first half of 1993 and has been conducted twice yearly since. Markets from the Middle East and Africa were included in the Index from 2004. Twenty five markets now participate in the survey: Australia, China, Egypt, Hong Kong, India, Indonesia, Japan, Kenya, Kuwait, Lebanon, Malaysia, Morocco, New Zealand, Nigeria, Oman, Philippines, Qatar, Saudi Arabia, South Korea, South Africa, Singapore, Taiwan, Thailand, United Arab Emirates and Vietnam. The last MasterCard Worldwide Index of Consumer Confidence survey was conducted from 15 March to 27 April 2011. A total of 17,620 qualified respondents were surveyed in the 25 markets with the sample being representative of the middle and upper income groups in each market. In each market except China and India, 400 or more people were surveyed. A minimum sample size of 800 was collected from China and India.
The Index is calculated based 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. The responses are consumers' thoughts on the six months ahead. Data collection was via internet surveys, personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The survey has a margin of sampling error of plus or minus four percentage points at the 90 percent confidence level, except China and India where because of the larger sample, the margin of sampling error is plus or minus three percentage points.
MasterCard and its Suite of Research Properties
The MasterCard Worldwide Index suite in Asia/Pacific, Middle East and Africa includes the long-running MasterCard Worldwide Index of Consumer Confidence, as well as the MasterCard Worldwide Index of Women’s Advancement, Online Shopping, Index of Financial Literacy, and the Index of Global Destination Cities. In addition to the Indices, MasterCard’s research properties also include a range of consumer surveys including Ethical Spending and a series on Consumer Purchasing Priorities (covering Travel, Dining & Entertainment, Education, Money Management, Luxury and General Shopping).
MasterCard also regularly releases Insights reports providing analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 80 Insights reports have been produced since 2004.
MasterCard has also released a series of four books on Asian consumer insights, authored by Dr. Yuwa Hedrick-Wong, Global Economic Advisor for MasterCard Worldwide and published by John Wiley & Sons.