Abu Dhabi sees rise in consumer confidence

The results of Abu Dhabi consumer confidence in economic performance index 2012, prepared by the Studies Directory of the Department of Economic Development, revealed that individuals confidence indicators were on the rise, especially confidence in both current and future economic conditions, individuals financial condition and government policies, compared to, 2011.

The general consumer confidence in economic performance index in 2012 registered about 125 points on average compared to 118 points in 2011.
The general index which reflected high levels of confidence for most of the year 2012 in contrast with 2011, started gradual improvement at the beginning of the year, scoring 127 points on the 200 point scale, compared to 118 points in January 2011. The index values climbed to 124 points in the last month of 2011 compared to 122 points in December 2011.

The rate of change of the general consumer confidence in the economic performance index of the Emirate of Abu Dhabi in 2012, was (5.9%) in comparison to 2011. The financial conditions indicator scored 110 points with (7.8%) rate of change; while the confidence in government policies indicator marked 117 points with (2.6%) rate of change, and the future expectations index 147 points with (5%) rate of change compared to the year 2011. 

Benchmark results stated that with the beginning of 2012, confidence levels increased among individuals and consumers about the economy of the Emirate of Abu Dhabi in General, especially in the wake of the announced implementation of a large number of infrastructure projects and investments in industry; and the beginning of the recovery of Abu Dhabi Securities market, due to banks and real estate companies positive business results in 2011.

The decision of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of UAE, to pay off debts of citizens, and to increase the number of subsidised commodities, reduced the burden on citizens and contributed significantly to increase their spending.

According to the index, all these factors contributed to the return of economic activity to its vitality in the Emirate of Abu Dhabi over the years that followed the global financial crisis, and helped to raise confidence levels for both the businessmen and investors, and buoyed demand for labor. The Emirate witnessed an increase in the number of new licensees across all business and professional activities alike, which reflected positively on confidence levels among individuals and consumers increasing their sense of job security and job opportunities considerably compared with year 2011.

The index analysis pointed out that government policies taken to alleviate the suffering of individuals and consumers had contributed significantly to strengthening their sense of improved financial conditions, indicating that the Central Bank have instructed banks to restructure commercial real estate loans to people and lower premiums, stressing at the same time not to force sale of property or unfair terms for rescheduling in mid-2012. 

The analysis noted the importance of the Central Bank's decision which required Islamic banks to apply early repayment fees like commercial banks after it was entitled to recover the full amount of the Murabaha financing, even if the customer attempts full repayment before the expiry of the loan.

It also commented the actions taken by the Ministry of Economy, Abu Dhabi Department of Economic Development, Abu Dhabi to control commodity prices in the month of Ramadan, which increased optimism among consumers and individuals, as all outlet and sales points were warned against manipulation of selling price or seizing the opportunity of increased consumption during the month of Ramadan, stressing that penalties would be imposed according to the Consumer Protection Law upon any manipulation or violation of the price list specified by the Ministry.   

During the months of 2012 some declines in scores of the index occurred , and that was due to the fear of individuals and consumers, especially in February and March of a wave hikes in prices of a number of foodstuff commodities, where most of the sellers raised prices of goods such as vegetables, fruits, oils, detergents, soaps and toiletries, as well as some other pet products, however; the indicator returned to its normal path after the Ministry of Economy obligated suppliers and producers to stick to the previous price list installed by the Committee, stating that their request to raise prices, will be pending, subject to approval by the Higher Committee.
 

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