Low salaries and rising prices sour mood

Satisfaction with the UAE economy has fallen sharply among consumers, with widespread dissatisfaction over low salaries and rising inflation, research reveals. According to Bayt.com and YouGovSiraj , 61 per cent of residents surveyed in the Emirates last month said their salaries have not kept pace with the cost of living, compared to 51 per cent registered in January's results. The survey revealed that 46 per cent of UAE residents are dissatisfied with their current compensation. Only 19 per cent of all GCC respondents cited that their salary had increased enough to keep pace with spiralling cost of living, while an "overwhelming" 63 per cent stated that their remuneration had not kept up, the researchers said. The Consumer Confidence Index (CCI) is a measure of consumer expectations and satisfaction of various elements of the economy including inflation, job opportunities and cost of living. Overall, consumer confidence has witnessed a considerable drop in the UAE, dipping by nine index points over the past four months. Consumer confidence levels also dropped across the GCC region, falling seven index points in Qatar and three points in Saudi Arabia and Kuwait, as compared to levels measured in January. The researchers said UAE respondents' tone was "largely negative" when asked about inflation, and the rise in living costs and rent prices. However, the research reveals that 34 per cent of all respondents feel they are in a better financial position than last year. "All respondents remain optimistic that their country's economy would be better in a year's time – with respondents in Oman and Bahrain at 48 per cent and 44 per cent respectively registering as the most optimistic," the researchers said. UAE respondents also showed the most marked decrease in the index regarding the current economic climate for buying consumer goods by falling 18 points, compared to a 12-point drop in Egypt and slightly more positive results in Saudi Arabia. The researchers said the results were largely negative – only 19 per cent of all respondents said it is a good time to buy and 38 per cent consider it bad. The survey showed that 38 per cent of UAE respondents are planning to buy a vehicle and 29 per cent property. "At an overall level, dropping indices may not be a prediction of economic performance but it could well be a reflection of the far reaching effects of inflation,", YouGovSiraj CEO Nassim Ghrayeb said in a statement. Ghrayeb added that this could put pressure on premium brands as consumers seek out better value offers. "One of the potential trends that could emerge from sustained high levels of inflation could be the growth of price brands. Most developed nations are witnessing such a trend where consumers are looking for brands offering them better value for money," he said. The index also measures the confidence of employees in their current work, and seeks to measure their individual attitudes and satisfaction towards the local job market in general. Results showed that the UAE's optimism on the job front dropped considerably from 58 per cent in January to 51 per cent last month, suggesting that jobs in the region are becoming harder to find. "On the employment front, the largest drops in terms of anticipated availability of jobs in a year's time came from Qatar and the UAE. The same trend was noticed in all of the other surveyed GCC countries," Ghrayeb said. Employee confidence dropped four points in the UAE, with 49 per cent of respondents citing it as a good period conducive to business and 50 per cent citing it a good time in terms of job availability. In comparison, confidence of employees fell by two points in Qatar, by one point in Saudi Arabia, while Kuwait and Algeria both registered five point improvements in their indices. The research revealed that Qatar and Oman recorded the most positive attitudes towards current business conditions. The results follow Mastercard's latest report on consumer confidence earlier this month that said confidence levels across much of the Gulf has dropped for the second half of the year, due to the global economic slowdown, record oil prices and soaring inflation. However, the credit card company's research showed that consumer optimism in the UAE rose during this time thanks to rising salaries and better employment opportunities. The UAE ranked third in overall consumer confidence in the research, despite declining consumer sentiment of the Middle East and Levant nations, Mastercard said in its report. MasterCard Worldwide's Index of Consumer Confidence report analyses consumers' perceptions of economic conditions over the six months ahead based on responses to five variables - employment, the economy, regular income, the stock market and quality of life.