Consumer confidence in the UAE is rising, putting the country back among the 10 most optimistic markets in the world thanks to an improving economy, according to research by Nielsen Group. The Emirates' latest reading of consumer confidence rose 11 points to 103, the 10th highest rating globally in Nielsen's survey.
The results mark a significant rise in the mood of UAE consumers, whose fears of a bleak economic future dropped the country to 13th place in the survey in results released just four months ago. Himanshu Vashishtha, the managing director of Nielsen in Dubai, said shoppers would continue to be cautious but might spend more on such items as travel, on which they had been cutting back. "It's not back to the golden days of the UAE, which was in the 112 range, but it is stable," Mr Vashishtha said. "People will watch and wait and they think we are in recovery. We also think we're on the road to recovery."
The 11-point rise takes the mood in the UAE past the 100-point neutral mark back into positive territory. The findings of the latest survey, conducted among 27,000 people in 55 countries in March, contrast starkly with consumers' views when they were surveyed in December. At that time, UAE residents were shaken by Dubai World's call for a debt standstill and confidence fell by the biggest margin among the countries surveyed.
But more clarity and information about the Dubai World debt restructuring and a return to growth for many sectors this year have buoyed the spirits of shoppers, Mr Vashishtha said. "There is some sort of stability in the multinational companies, so they are returning to growth, beginning to hire, and beginning to spend in the region," he said. Philippe Dauba-Pantanacce, a senior economist at Standard Chartered Bank in Dubai, said he was not surprised to see a rebound in UAE consumer confidence.
"Many indicators and anecdotal evidence point to a gradual recovery in the Emirates," he said. "Trade and exports are up 15 per cent in the first quarter, job vacancies have risen by up to 20 per cent in certain sectors, and international passenger traffic continues to grow very strongly." Mr Dauba-Pantanacce added that Central Bank data showed that the country's retail sales had also reversed their decline.
The generally rising price of oil is also helping boost confidence, as it points towards rising income for the country as a whole, he said. Global consumer confidence rose from a score of 86 six months ago to 92, a trend reflected in a pickup in global retail activity, Nielsen said. With the increase in optimism observed by the survey, which was conducted March 8-26, the global rating reached its highest level since the third quarter of 2007.
The improvement was driven by improved job outlook, which has risen steadily over the past six months. About 43 per cent of global consumers rated their employment outlook as excellent or good on the latest survey, compared with just 35 per cent six months ago. The most optimistic country was India, with a measure of 127, followed by Indonesia with 116 points and Norway with 115. The most pessimistic nations were Lithuania at 46, Croatia at 48 and Portugal at 51. While all regions saw improvements in consumer sentiment, Asia Pacific and Latin America were expected to outpace the recovery in the US and Europe, Nielsen said.
The MENA region and Pakistan were optimistic overall, with 59 per cent of respondents rating the state of their personal finances as "excellent" or "good" for the next year. The UAE, in particular, was in the middle of a slow but steady recovery, and consumer confidence was expected to continue rising, Mr Vashishtha said. "We definitely expected this time for the confidence to go up, and we do expect it to be maintained and go up in the consequent periods."