By Daniel Shane
Gulf state bucks trend of developed markets which saw deterioration of sentiment during quarter
Consumer confidence in the UAE was among the highest in the world during 3Q2012, according to a report published by Nielsen, bucking the trend of developed markets in Europe and Asia which suffered declines in spending sentiment.
The market intelligence firm’s latest quarterly index rated consumer confidence in the Gulf state as the third highest in the world, jumping six points to 114 compared to the previous quarter, behind Indonesia/India and the Philippines.
Saudi Arabia, the largest state in the GCC, was in fourth place, despite consumer confidence receding by two points on the index to 113.
Confidence in developed nations including Spain, Hong Kong and South Korea dropped as consumers reigned in spending on the back of a perception their economies had drifted back into recession.
The research, which surveys 29,000 consumers around the world, measures the spending intentions of people in 58 countries. A score of below 100 indicates a pessimistic attitude to spending from consumers, whereas a score of higher than this benchmark represents a positive one.
On a global basis, 62 percent of respondents said they believed their respective countries were currently in a recession, up from 57 percent in the immediately prior quarter. Of those that said their economy was in a recession, just under half (49 percent) said they thought the recessionary climate would continue for another year.
“The subdued third quarter results reflect an overall trend that is neither positive nor negative as consumers are treading water very carefully,” said Dr Venkatesh Bala, chief economist at The Cambridge Group, part of Nielsen.
“Consumers played it safe in Q3, especially in Europe, which still faces a very precarious economic situation despite some recent stabilizing policy initiatives by the European Central Bank. Export growth from China, especially to the euro zone, has slowed substantially accompanied by restraint among consumers there,” he added.
The Middle East and Africa was the only region to a report a decrease in recessionary mindset, paring back five percentage points to 72 percent of consumers.
Overall, consumer confidence ticked up in 30 of the 58 markets surveyed by Nielsen, while it declined in 19 and remained flat in seven.
The top countries rated in the index were Indonesia/India; Philippines; UAE; Saudi Arabia; Thailand; Brazil; China; Malaysia; Switzerland; and Egypt.
The ten countries that showed the least amount of consumer confidence were: Hungary; South Korea; Croatia/Portugal; Greece/Italy; Spain; Japan; Romania; France; Slovakia; and Bulgaria.