Consumer confidence is steadily improving in the UAE, according to a survey released Monday.
UAE consumer confidence up
Consumer confidence is steadily improving in the UAE, according to a survey released Monday. The latest quarterly poll conducted by the research firm YouGov and the jobs website Bayt.com showed the UAE had the second-biggest jump among the 10 Middle-Eastern countries included in the survey, just behind Kuwait.
Almost half the consumers surveyed said they thought business conditions would be better in the future, with 40 per cent saying the UAE's economy would improve in a year. "Overall, the situation is improving," said Jeetu Sharma, a research associate at YouGov in Dubai. "Things are getting back towards normal, as they were before the economic downturn. People are more willing to buy things, are more confident about their jobs, and they expect their financial situation to improve in a year's time."
Consumer sentiment in the region began to lag at the beginning of this year after the financial crisis and economic downturn started to take effect. The most robust markets took the biggest hit in the first quarter of this year, with confidence in the Emirates and Kuwait dropping the most. Now, they are making the biggest recovery, said Mr Sharma. "Historically, Kuwait, Qatar and UAE were the ones that were the most highly affected in the past," he said. "They are the most strongest economies in the Middle East at the moment, so they are improving at a much better rate."
Lebanon was the only country to record a drop in consumer confidence in the latest survey, conducted in August with 9,430 respondents. Philippe Dauba-Pantanacce, a senior economist at Standard Chartered in Dubai, said the improvement in sentiment came as no surprise because it reflected the global decrease in economic uncertainty. Conditions are improving locally as well, with local stock exchanges faring well and oil prices on the rise, he said. "In the sectors that were the most affected, like the real estate sector, which has acted as a major catalyst for the confidence crisis here, we are seeing a stabilisation," he said. "These are all contributors to better consumer confidence."
The UAE had the most improved scores when it came to willingness to spend and consumers' expectations. In the fourth index, which covered how people feel about the local job market, the UAE posted a modest gain. However, while 21 per cent of the respondents in the Emirates said their personal financial situation was better than it was last year, about 40 per cent said they were worse off - the highest rate among all surveyed countries.
Consumers are also reluctant to spend on big-ticket purchases. Across the region, 42 per cent said it was a bad time to buy items such as televisions or refrigerators. While consumers in the UAE may be more optimistic, the hard lessons of the past year are still fresh in their minds, said Laurent-Patrick Gally, a retail analyst at Shuaa Capital in Dubai. "Even if you think the future is brighter, but you have been exposed to the ups and downs of the economy recently, you don't want to put yourself in full-spending mode because you know things can potentially trip again," he said.