UAE in world’s top 10 for consumer confidence

Worries about job security decline but still remain major concern

The UAE’s consumer confidence index has shown a slight drop of two points, bringing the index from 103 points in the first quarter of 2010 to 101 in the second quarter.

However, the UAE still maintains last quarter’s inclusion amongst the top 10 most optimistic nations according to the latest edition of the Nielsen Global Consumer Confidence Index.

Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among approximately 27,000 internet users in 48 countries throughout Asia Pacific, Europe, Latin America, the Middle East and North America.

Consumer Confidence Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Global consumer confidence cautiously edged up one index point to 93 in the second quarter as confidence increases in booming Asian markets were offset by European consumers’ growing concerns of an escalating debt crisis, which battered confidence levels in nine out of 24 European markets.

In the US, the world’s largest economy, consumer confidence rose two points indicating a continuation on course for a slow, but steady climb out of the recession.

India (129 index points), Indonesia and Vietnam (both 119 index points) were the most optimistic nations in the second quarter of 2010.

Meanwhile, Lithuania (52) and Japan (55) were the most pessimistic nations.

The largest drop of consumer confidence was in Spain which plummeted by 10 index points to its lowest level on record at 69 index points from 79 in Q1 of this year.

“Despite bright prospects in Asia, the global economic recovery that was anticipated this year has been hindered by Europe’s ongoing debt crisis.

UAE consumer confidence is reflecting this disparity with a marginal drop not impacting its position in the top 10 optimistic nations this quarter,” said Himanshu Vashishtha, Regional Managing Director, Middle East, Pakistan, The Nielsen Company.

“The UAE consumers realise that the road to full economic recovery will likely take longer than expected and that they should still spend cautiously. With the steep decline of early 2009 well behind them, consumers continue to be comfortable about their financial situation and job perspective this quarter, largely convinced that the worst is over,” he added.

The number of consumers that perceive the UAE to be in a recession has dropped three points since the last quarter.

The survey also revealed that about 76 per cent of the nation’s consumers have changed their spending habits to save on household expenses, even though 64 per cent of consumers surveyed said that their state of personal finance is excellent or good for the next 12 months.

“In the UAE, consumers are still focused on repairing their household balance sheets with 50 per cent allotting any remaining income (once they have covered their essential living expenses) to savings and paying off debt (34 per cent), and focusing on cutting down their car and out of home entertainment expenses,” explained  Sevil Ermin, Managing Director, UAE, The Nielsen Company.

“However, since the starting of the summer months, UAE consumers appear set to take that much needed vacation this quarter,” she added.

Globally, concerns about the economy and job security remain consumers’ top concerns in Q2 of 2010.

In the UAE, 17 per cent consumers cite job security as a main life concern but this number has decreased since last quarter which previously stood at 20 per cent.

More than half (58 per cent) of consumer believe that the job prospects in UAE over the next 12 months will be excellent or good. 

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