Lebanon’s consumer confidence drops this quarter after last year’s improvement, latest Bayt.com and YouGov Siraj survey reveals
Consumer confidence has dropped in Lebanon, reversing an improvement in consumer confidence felt at the end of last year, 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 that Lebanon moved down the index by 12.1 points, the highest drop among the surveyed countries in the Middle East.
As in the previous survey conducted in the last quarter of 2009, half of the countries surveyed around the Middle East and North Africa region witnessed declines in their consumer confidence, with the other half showing positive improvements. In a complete reversal of the last wave when it recorded the highest improvement in consumer confidence, in the current wave, Algeria reported the second highest drop in consumer confidence, moving down the index by 10.7 index points.
In the Gulf region, the UAE, Bahrain and Kuwait all saw improvements in consumer confidence, moving up the index by 4.4, 1.9 and 0.9 index points respectively. Respondents in Saudi Arabia and Qatar, however, did not feel that conditions for consumers had improved in their countries: both moved down the index by 2.4 and 0.3 points respectively. In North Africa, consumer confidence in Morocco improved by a positive 6.2 points, with a drop of 0.7 points in Egypt.
“It is always interesting at the first quarter of each year to see how consumer confidence changes from one calendar year to the next. In this wave, what we have seen is that in some cases countries have undergone a complete reversal: they reported drops in the last wave but have improved this time around and vice versa,” noted Amer Zureikat, Bayt.com’s regional manager.
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, the respondents are asked questions about their personal financial circumstances and how they compare to the same period last year. Overall, 36% of the region’s respondents said their financial position was the same and just over a quarter, 26%, said it had got better. In Lebanon, 26% said they were better off than last year, 35% said they were in the same position as last year and 33% said they were in a worse position than last year.
Among the countries surveyed, personal financial positions improved most in Saudi Arabia and Egypt, where 31% of respondents in each country said they were doing better than last year, and at the other end of the spectrum, respondents in Jordan were the worse off, with a total of 41% stating that their financial position was worse. Countries in the Gulf largely varied as to the percentage of respondents who felt their personal financial position had improved: 27% of respondents in Qatar said their financial position was better as did 24% in Kuwait, and in Bahrain and the UAE, 21% said their personal financial position was better than last year.
“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. Since the last wave, it seems conditions in some countries have changed completely, with countries that previously showed improvements now showing declines, which perhaps signals the instability still felt across the region as a result of the recession,” commented Joanna Longworth, Chief Marketing Officer, YouGov Siraj.
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.
Reporting the largest drop was Lebanon which moved down the index by 14.2 index points, followed by Algeria which moved down by 8.1 points. The UAE, however, reported an improvement, moving up the index by 2.3 index points, and of the Gulf countries, Bahrain reported the biggest improvement, moving up the index by 6.6 points. The rest of the Gulf countries fared worse: KSA, Qatar and Kuwait all moved down the index by 3.5, 3.2 and 0.4 index points, respectively. Notably, Morocco reported an index improvement of 6.5, while Egypt reported a minor improvement of 0.7 index points.
On the whole, respondents are expecting to be in a better financial position next year. Overall, 49% of the respondents surveyed believe that their personal financial position will be better next year - an improvement of two percentage points since the last wave. By contrast, just 7% of the region’s respondents believe that their financial position will become worse. In Lebanon, 40% of respondents believe that their personal finances will be better a year from now, compared to just 9% who believe they will become worse. Most optimistic that their personal financial position will be better a year from now are respondents in Oman and Qatar where 57% and 52% said things would be better, and Saudi Arabia and Egypt, where 51% in each country said their personal financial position will be better a year from now.
The respondents also remain largely optimistic that their country’s economy will be better in a year’s time. Overall, 41% said that their country’s economy will be better, 21% said it will remain the same, and 20% said it will become worse. Currently, respondents in Oman, Bahrain and the UAE are the most positive about the expected improvements in their country’s economy, with 60%, 56% and 48%, respectively, stating things will be better. In Lebanon, 30% of respondents said their country’s economy will be better in a year’s time, compared with a quarter of respondents who said that it would become worse. Respondents in Jordan were most pessimistic about their country’s economy a year from now: 37% said that it will become worse.
As part of the survey, respondents were also asked what they feel their propensity to consume is, as part of the Propensity to Consume Index (PCI). In a complete reversal from the last the last wave when it moved down the index by 10.0 points, in this wave the UAE moved up the index by 11.3 index points - the highest increase among the surveyed countries. Syria and Qatar both reported positive improvements, moving up the index by 9.5 and 5.5 index points respectively. At the other end of the spectrum, Lebanon recorded the largest drop, moving down the index by 15.8 index points, followed by Algeria, which moved down the index by 11.2 points.
Unlike the previous wave when it moved up the index by 26.7 index points, in the current wave Bahrain moved down the index by 9.4 index points. Drops were also recorded in the Gulf states of Kuwait and KSA which moved down the index by 3.5 and 2.4 points respectively.
Asked whether it was a good time or not to buy consumer durables, the respondents largely agreed that it was either a bad or neutral time to buy: 37% agreed it was a bad time to buy items such as televisions or refrigerators, while 35% of the respondents said it was a neutral time.
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.
Almost all of the countries showed decreases in this index, with the exception of Morocco and Bahrain which moved up by 4.4 and 2.1 index points respectively. Showing the biggest decrease was Algeria, which moved down the index by 8.4 index points, followed by Lebanon which moved down by 5.9 index points. In the rest of the Gulf, Qatar, KSA and Kuwait all moved down the index by 3.4, 2.8 and 2.2 points respectively.
When asked whether they believe more jobs will be available in a year’s time, respondents are roughly divided: 30% said more will be available, 28% said the job situation will remain the same and 28% said the availability of jobs would be worse. In Lebanon, 19% believe the availability of jobs will get better while 29% 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 64% agreeing that there is a disparity, while just 19% agreed they have increased in line with the cost of living, and 5% said 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,” Zureikat concluded.
Data for the March 2010 Consumer Confidence Index Survey was collected online between 2 and 21 March 2010 with 7,225 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.
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