Consumer confidence appears to still be stable in the UAE, following the drop 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 the UAE increased by a slight 0.5 points since last June.
This increase was the lowest increase recorded across all countries since June 2010, with the highest being Kuwait which saw an impressive rise of 6.3 points. However, Lebanon who last quarter recorded the largest increase moving up by 7.6 index points, now saw a drop of 2.3 points. The largest drop was recorded from Bahrain who went down 14.8 points.
KSA and Syria all rose in consumer confidence this quarter, moving up the index by 1 and 3.4 points respectively. Qatar dropped by 0.8 points. In North Africa, consumer confidence in Morocco and Egypt dropped by 1.4 and 2.8 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, 35% of the region's respondents say their financial position is the same as last year and just over a quarter, 27%, say it has gotten better. In the UAE, 24% say they are better off than last year, 36% say they are in the same position as last year and 33% say they are in a worse position than last year.
Among the countries surveyed, 34% of respondents in Qatar say they are doing better than last year, compared to 29 % in KSA, 24% in Kuwait and 15% in Bahrain. However in Jordan, 44% of respondents actually feel that their financial position is worse than last year.
"The figures are interesting because there is little correlation between the countries of particular areas of the Middle East, demonstrating clearly how each country's economy is completely independent. There are also some key changes in the figures since the last wave which perhaps signals traces of the instability that was felt across the Middle East region during the recession," commented Amer Zureikat,Vice President 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 is seen in Bahrain, with a drop of 12.5 index points since the last quarter. The UAE remained relatively stable reporting only a slight decrease of 1.7 points since the last quarter with Kuwait and Syria reporting the biggest increase, moving up the index by 5 and 4.9 points respectively.
On the whole, respondents are expecting to be in a better financial position next year. Overall, 48% 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, 47% of respondents believe that their personal finances will be better a year from now, compared to just 11% that believe they will become worse. Most optimistic that their personal financial position will be better in a year's time are respondents in Qatar with 53% confirming this statement.
Respondents also remain largely optimistic that their country's economy will be better in a year's time. Overall, 36% say that their country's economy will be better, 21% say it will remain the same, and 24% say it will become worse. Respondents in Oman and Kuwait are the most positive about the expected improvements in their country's economy, with 51% and 50% respectively stating things will be better. Respondents in Egypt are most pessimistic about their country's economy a year from now; 38% say that it will become worse. In the UAE, 43% of respondents believe that their country's economy will be better in a year's time, compared to just 18% 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 remained stable moving up this index by just 0.1 points compared to the previous quarter. Lebanon saw an impressive rise of 10.3 points. At the other end of the scale, Bahrain recorded the largest drop, moving down the index by an exceptional 20.7 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 (62%) stating they are not interested in making any investment in property. Within the UAE, 67% say they will not be buying any property. Of those wishing to purchase a property, 63% say they are likely to opt for a new property.
"People's expectations of the economy never quite match up to how they expect their own financial situation to change - it's one of our greatest strengths that we tend to believe that we will outperform" 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 1.9 index points versus the previous quarter on this measure. Showing the biggest decrease is Bahrain, which moved down the index by 13 points, followed by Egypt which moved down the index by 4.2 points. The most impressive rise was recorded by Kuwait which moved up 9.7 points.
When asked whether they believe more jobs will be available in a year's time, respondents are roughly divided: 27% say more will be available, 28% say the job situation will remain the same and 30% say the availability of jobs will be worse. In the UAE, 35% believe the availability of jobs will get better while 26% 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 62% 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.
"We conduct our quarterly Middle East Consumer Confidence Index Survey in order to chart how consumer confidence levels are changing as the region goes through different economic cycles, and faces the challenges and pressures wrought by economic trends and events across the globe. This seeks to provide all stakeholders, from regional businesses to local organisations and HR professionals with up-to-date information that is both relevant and reliable as a snapshot of current market trends, concluded Zureikat.
Data for the September 2010 Consumer Confidence Index Survey was collected online between 22 August and 8 September 2010 with 8,528 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.