UAE consumer confidence drops dramatically

LOW CONFIDENCE: Consumer confidence in the UAE is lowest in the Gulf region, according to new research. (Getty Images)

Consumer confidence has dropped dramatically for the second time this year in the UAE - making it the least optimistic country in the Gulf region, according to new research.

The results of the survey by Middle East job website Bayt.com in conjunction with research specialists YouGovSiraj indicate generally negative responses, with only 31 percent of all respondents feeling that they are in a better position than last year.

An equal number however felt that they were in a worse position than last year.

The UAE dropped by eight index points while Kuwait increased three points, with minor decreases in Qatar by 0.3 index points followed by Saudi Arabia with a drop of 2.1 index points, and a drop in Bahrain by 4.9 index points.

Consumer expectations and optimism towards the future, the survey found, dropped considerably in the UAE, falling by 9.8 points since the previous quarter.

In comparison, Kuwait recorded a marginal dip of 0.3, while KSA and Bahrain noted decreases of 1.9 and 4 points respectively. Qatar remained the only Gulf country to feel an improvement, with an increase of 2.3 index points.

Optimism for the future in terms of their country's economy remained relatively low from respondents across all countries, with 35 percent believing their economy will deteriorate.

There were general feelings of optimism however regarding how people feel their financial positions would change in a year's time, with 46 percent feeling they would be better off.

Most optimistic were residents of Gulf states Kuwait and Qatar, with 55 percent and 52 percent anticipating better finances after a year in addition to 55% of Pakistan's respondents.

The Consumer Confidence Index (CCI) is a measure of consumer expectations and satisfaction of various elements of the economy including inflation, job opportunities and cost of living.

Bayt.com's CEO Rabea Ataya said: "The way to find out how people are truly feeling about the current business and economic conditions in a particular country is through gaining insights into consumer opinion."

The CCI is ascertained in part by seeking to find whether the respondents feel that their current financial position is either better, or worse than the previous year.

The index additionally reveals how respondents rate the current economic climate in terms of whether it's a good, neutral or bad time for buying consumer goods.

The majority of respondents at 40 percent agreed it was a bad time to buy, which marks a slight increase on the last wave's 38 percent.

Across the surveyed countries, Morocco, followed by the UAE, recorded the greatest decreases in the Propensity to Consume Index falling by 11.6 and 5.8 points each.

Syria and Lebanon recorded phenomenal boosts in terms of spending power, moving up the index by 17.4 and 13.2 points as compared to the previous wave.

That Syria and Lebanon showed such marked improvements may indicate the greater political, economic and social stability actuated recently.

"While the Consumer Confidence Index is a lagging indicator and does not necessarily predict economic performance it does reflect the mood of consumers in the market place," said Nassim Ghrayeb, CEO, YouGovSiraj.

Attitudes and confidence levels of employees towards work and the local job market are also assessed as part of the CCI.

The UAE fared no better on this index, moving 5.1 points down the index - most likely attributable to dwindling job prospects and limited chances of career growth.

"In conducting this research, we can learn how people feel about their current salaries, which provides some very telling indicators: an overwhelming 68 percent of respondents across the region said salaries haven't increased with rising living costs, with only 20 percent finding they have," added Ataya.

In the UAE, almost three quarters of people - 72 percent - said their salary hadn't kept pace, marking a significant continued increase from the 61 percent of respondents in April's survey.

The data for the latest Consumer Confidence Index Survey was collected online with 13,792 respondents across the UAE, Saudi Arabia, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan.

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READERS' COMMENTS

ALL of my friends planning to move
Posted by deen on Thursday 28 August 2008 at 10:29 UAE time

In one go everything is going up like Rent, consumables, salik, RTA, visa fees etc etc., beginning of the year school transport fee double for what, who is responsible for this sudden increase int he price, people with kids are having hard time to manage, most of my friends are planning to move and identify the very best schools. I dont know which country in the world has changed visa fee n rules so many times.

consumer confidence
Posted by rene, Dubai, UAE on Thursday 28 August 2008 at 09:38 UAE time

Wow, they make it sound like a surprise !!! Just compare with the 200 most used items in the international cost of living index report and see where Dubai ends up. I have started to move my money away from UAE (Dubai) as for sure the famous bubble will collapse soon.

So True, the index speaks for itself
Posted by John Doe on Wednesday 27 August 2008 at 20:01 UAE time

You got that right Bob, nothing in this country makes sense anymore, I know ppl by the dozens applying for immigrations elsewhere, you don't have to buy a stupid property in the desert to attain a good immigration status in countries like Canada or Australia!

Very sad indeed, what the situation has turned out to be, one can only hope that this improves with time and that the Sheikhs specifically come to their senses.

Why stay when the other options cost a third
Posted by Bob Matthews, Dubai, UAE on Wednesday 27 August 2008 at 14:28 UAE time

Surprise? No. With rents having risen by 300% and groceries by 200% does anybody think we are wanting to stay here? The builders are buying the buildings they are building. The rest is coming from Saudi and Russian Oil money. I don't know what the laws are - does anybody? Visa laws are so screwed up that I don't know if my wife can visit me! Its time somebody got out of their execujet and took a good hard look at what is going on here. I thought the big-bosses had a handle on it but I'm afraid that after almost a decade of residence all I see is greed and arrogance and an erosion of values.

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