Optimism grows about UAE economy in Q2… here is why

UAE residents among world’s top 5 countries where confidence and optimism was highest in second quarter

The UAE’s second-quarter score reversed a four-point decline in the first quarter with a five-point increase to 109, making it highest in the Middle East and Africa region, according to consumer confidence findings from Nielsen.

Job prospect sentiment improved nine percentage points (60 per cent favorable), personal-finance sentiment was brighter, improving six percentage points (68 per cent favorable) while immediate-spending intentions remain flat.

Ranked fifth globally, the UAE was among the world’s 10 countries where the confidence and optimism was above the score of 100, Neielsen said.  Markets reaching or exceeding a score of 100 in the second quarter of 2016 included: the Philippines, India, Indonesia, US, Denmark, UAE, Vietnam, China, Pakistan, Saudi Arabia, Peru and Thailand.

Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

"Confidence in the UAE increased five index points in the second quarter after a four-point index decline at the start of the year amid an environment of volatile global oil prices,” said Arslan Ashraf, managing director, Nielsen Arabian Peninsula and Pakistan.

“The second-quarter results showed that respondents were more confident about job prospects and personal finances than during the first quarter. But market dynamics have not changed significantly, and consumers were cautiously optimistic about spending intentions. They continue to be prudent with their expenses, especially when it comes to spending on new clothes, out-of-home entertainment and out-of-home dining."

Regional & Global

In the six Africa/Middle East countries measured, confidence scores, which ranged from a high of 109 in the UAE (a five-point increase from the first quarter) to a low of 78 in South Africa (a three-point increase) have been relatively consistent in each country over the past three or four quarters. Confidence in Saudi Arabia and Pakistan remained at 104 each, unchanged from the first quarter. Egypt’s score of 81 increased three points from the first quarter, while Morocco’s score of 83 declined one point.

Global consumer confidence held steady in the second quarter of 2016 at 98, an index score that was flat from the first quarter. North America was the only region to sustain growth momentum in the second quarter with a three-point confidence increase to 111.

In North America, U.S. consumer confidence maintained positive momentum in the second quarter, increasing three points to 113 from the previous quarter.

In Asia-Pacific, confidence was relatively stable at 107, a one-point decrease from the first quarter.  Japan’s confidence was of particular significance since it decreased four points to 69; it was Japan’s fourth consecutive quarter of declining scores, amid weak consumption and wage growth. Japan’s GDP has been on a declining trend since 1997 and is currently at 0.5 per cent. Japan’s exports fell for the eighth consecutive month in May. China’s score increased one point to 106

In Latin America, confidence remained at 78, unchanged from the first quarter. Brazil’s score was flat at 74, while Peru’s score increased 11 points to 102.

In Europe, Germany’s confidence decreased one point to 96. Meanwhile, Nordic countries and Eastern Europe showed confidence increases in the second quarter.

 

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