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03 March 2024

UAE consumer confidence fifth highest in the world

By Parag Deulgaonkar

Consumer confidence in the UAE has remained the highest in the region and fifth highest in the world by end of 2012, with optimism for local job prospects holding steady for 2013, according to research firm Nielsen.

In the new survey, released on Tuesday, the research firm, said that even though the confidence index for the UAE and Saudi Arabia fell by one index point in the fourth quarter compared to the third quarter 2012, their scores of 113 and 112, respectively, were are among the highest reported among 58 countries and above the baseline of 100 which indicated degrees of optimism and pessimism.

Overall, consumer confidence fell in four of six Middle East/Africa markets, in the fourth quarter.

According to the survey conducted between November 10 and 27, 2012, consumer confidence declined in 33 countries and increased in 19 countries. The survey polled over 29,000 online consumers in 58 countries in Asia-Pacific, Europe, Latin America, Middle East, Africa and North America.

India topped the list for most confident consumers globally in the fourth quarter followed by Philippines (119) and Indonesia (117) in the consumer confidence index. Crisis-ridden Greece was last with consumer confidence index at 35.

"Consumers around the world grappled with increasing economic concerns as the Euro zone crisis spread from troubled to core countries, the United States fiscal cliff threat loomed large, and China’s rising inflation sparked monetary policy action,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen.

“Consumers are proceeding with caution in 2013 and showed renewed discretionary spending restraint in the fourth quarter amid further global economic and political uncertainty."

Almost 59 per cent of global respondents said they were in a recession in the fourth quarter, an improvement from 62 per cent the previous quarter and 64 per cent for the same period in 2011. North America posted the most significant recessionary mindset change, as the number of Americans who said they were in a recession fell from 81 per cent in the third quarter to 74 per cent in the fourth quarter.

While global respondents’ employment concerns remained flat at 15 per cent relative to the same quarter in 2011, concerns about the economy declined three percentage points globally from the fourth quarter 2011 to 15 per cent.
However, respondents’ concerns over increasing food prices and utility bills went up globally since the same period in 2011, increasing one and two points, respectively, to eight percent each.

Global respondents’ optimism for local job prospects held steady, with 45 per cent of respondents anticipating that employment opportunities would be good or excellent in the coming year.

Confidence in personal finances was 53 per cent, no change from the previous quarter and an increase of one point from Q4 2011. Sixty-three per cent of global respondents said it was not a good time to buy things wanted and needed over the next 12 months.

The YouGov and McGill Consulting Group Business Confidence Index, issued last week, revealed overall business confidence has remained the most stable in the UAE despite a recent decline in sentiments across the region.

In its fourth quarter 2012 business survey, Dubai’s Department of Economic Development also concluded that economy of the emirate was set to sustain its growth momentum with investor confidence on the return and increasing activity across core sectors such as trade, tourism, manufacturing and even real estate as reflected in the overall business sentiment in the emirate.