Consumer confidence is on the rise, making the Emirates the seventh most optimistic country out of the 28 nations surveyed by Nielsen, but job security is the public's major concern.
UAE confidence rising
ABU DHABI // Consumers in the UAE have had a rebound in confidence in recent months, according to a survey by Nielsen. Nielsen's quarterly survey saw consumer optimism grow four points compared with a record 21-point drop in the company's March survey; a deeper fall than any of the 51 countries surveyed then, apart from Russia and Brazil. The latest result makes the Emirates the seventh most optimistic country of the 28 nations surveyed by the pollster. In March it was the 10th most optimistic. The June survey, which polled 14,029 online consumers, saw confidence levels in the UAE rise to 93 index points from 89 three months earlier, but still below the 100-point level on Nielsen's 200-point scale. Piyush Mathur, Nielsen's regional managing director for the Middle East, North Africa and Pakistan, said the rise in consumer sentiment was a turning point for the country, and an indication that residents were starting to embrace the idea of recovery. One major factor was an improved feeling of job security, Mr Mathur said. "Consumers are saying that the job cuts that had to happen have happened," he said. "Now they're feeling a bit more secure that there may not be further job cuts in their companies." Job security and the economy were the top two concerns for 44 per cent of UAE respondents in the June survey, down from 50 per cent in March, Mr Mathur said. Employment security and the economy also remained the top two concerns for consumers worldwide but the level of concern had dropped two points and four points respectively, Nielsen said. Globally, consumer confidence rose five points to 82, from 77 in March. India had the biggest jump, at 13 index points higher than in the previous survey. Japan, South Korea, Hong Kong and Indonesia rose nine points, while Taiwan and Brazil rose eight. The US and New Zealand's consumer confidence levels were flat, and Germany dropped one point. Philippe Dauba-Pantanacce, a senior economist at Standard Chartered in Dubai, said that in the UAE and the region the rising oil price was one of several factors in boosting confidence. "Most of the macroeconomic indicators have stopped their free fall," Mr Dauba-Pantanacce said. "If we focus on this country, in the real estate market we have seen not necessarily a reverse of the trend but at least various research houses have come up with indicators showing the market is stabilising. "We're talking about a major part of the economy here. The perception is getting better, for sure." But the rise in consumer confidence did not necessarily translate into more money in the till for retailers, said Mr Mathur. About 66 per cent of respondents in the UAE said they were saving their spare cash, up from 63 per cent three months ago, he said. And 87 per cent of UAE respondents said they had changed their spending habits to save on household expenses, up from 70 per cent on the previous survey. "They have now learned to save because of that uncertainty," Mr Mathur said. "They have not been willing to spend as much and that still remains." He also cautioned that the rise was an early indicator of recovery but sentiment could shift again. "We don't know what will happen in next three months, six months," Mr Mathur said. "There could be a double dip; that it will go down again at some point." Mr Dauba-Pantanacce agreed: "There is a slight shift ? this is true in the perception of the consumer and this is also true in the actual economy. "We have been seeing indicators which are encouraging but we are not in a drastic shift. Absolutely not. We see that we're not in free fall any more, which is positive, but we're not in boom time." Previously, Nielsen conducted its consumer confidence index twice a year, but due to the economic downturn and the rapid shifts in consumer confidence, the firm began conducting it each quarter, Mr Mathur said. firstname.lastname@example.org