By Andy Sambidge
New poll of 2,600 people reveals sharp fall in confidence in most GCC countries.
Consumer confidence in the Middle East for the second half of 2009 has fallen sharply compared to six months ago, according to a new survey.
The MasterCard Worldwide Index of Consumer Confidence shows the region ranking at 49.9 out of 100, well below the score of the first quarter (72.7) and a year ago (66.4).
The poll shows that in the Middle East and Levant, all economic factors have declined compared to a period ago, although the overall Index score for the region is higher than that of Asia/Pacific (38.7).
Saudi Arabia (67.1), Qatar (71.4) and Lebanon (64.4) remain the most optimistic countries in the region although even here the ranking is lower than in the previous survey earlier this year.
The Index scores for UAE (29.6 compared to 75.4 a period ago) and Kuwait (49.5 compared to 96.6 a period ago) have dropped sharply, with the decline being blamed on the erosion of confidence in regular income in the UAE and the stock market in Kuwait.
Now in its fifth year in the Middle East and Levant, the MasterCard Worldwide Index of Consumer Confidence is the region’s most comprehensive 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 March 23 to April 18 and involved 2,600 consumers. Five economic factors were measured - employment, the economy, regular income, stock market and quality of life.
It also included MasterCard Worldwide Survey on Consumer Purchasing Priorities which revealed that in the Middle East and Levant, 55 percent of consumers plan to maintain the same level of recreation spending as the last six months.
The region's the top spending priorities were dining and entertainment (71 percent), followed by fashion and accessories (49 percent), and consumer electronics (42 percent).
It also showed that 73 percent of consumers intend to save for precautionary reasons.
People would spend more on small luxuries and make other purchases e.g. a car If they considered that their jobs were safe - at the moment many don't know if they will still be in work at the end of the month. Even the inducements of unemployment protection offered by some retail outlets do not help as there is a lack of trust in the offer (read the small print)