Consumer confidence has risen dramatically in Lebanon, reversing a steep drop of12.1 index points felt last March, according to the latest Consumer Confidence Index (CCI). The Consumer Confidence Index, a quarterly survey conducted by the Middle East’s number one job site Bayt.com in conjunction with research specialists YouGov Siraj, found that Lebanon moved up the index by7.6 points, the highest rise among the surveyed countries in the Middle East.
In the Gulf region, KSA, Kuwait and Bahrain all dropped in consumer confidence this quarter moving down the index by4,3.2 and1.7 index points respectively. In North Africa, consumer confidence in Morocco improved by3.9 index points but saw a drop of5.5 index points in Egypt.
The Consumer Confidence Index (CCI) is a measure of consumer expectations and satisfaction of various elements of the economy including inflation, job opportunities and the cost of living.
As part of the CCI, respondents are asked questions about their personal financial circumstances and how they compare to the same period last year. Overall,35% of the region’s respondents say their financial position is the same as last year and just over a quarter,27%, say it has gotten better. In Lebanon,25% say they are better off than last year,30% say they are in the same position as last year and40% say they are in a worse position than last year.
Among the countries surveyed,20% of respondents in the UAE say they are doing better than last year, compared to30 % in KSA and25% in both Bahrain and Kuwait. However in Jordan,41% of respondents actually feel that their financial position is worse than last year.
“The figures are interesting because there is little correlation between the countries of particular areas of the Middle East, demonstrating clearly how each country’s economy is increasingly independent. There are also some key changes in the figures since the last wave which perhaps signals traces of the instability that was felt across the Middle East region during the recession,” commented Rabea Ataya, Chief Executive Officer, Bayt.com.
In addition to financial position, consumer confidence is assessed by asking the respondents about their level of optimism towards the future, which forms the Consumer Expectations Index (CEI). The countries varied widely in terms of their consumer expectations.
Lebanon reports the highest increase of all countries, moving up the index by10.3 points. This is a substantial reversal from the14.2 index point decrease the country showed in the last quarter. Bahrain, on the other end, reports the biggest decrease, moving down the index by8.1 points.
On the whole, respondents are expecting to be in a better financial position next year. Overall,49% of respondents believe that their personal financial position will be better next year. Most optimistic that their personal financial position will be better in a year’s time are respondents in Qatar and KSA where51% and50% confirming this statement.
Respondents also remain largely optimistic that their country’s economy will be better in a year’s time. Overall,38% say that their country’s economy will be better,20% say it will remain the same, and23% say it will become worse. In Lebanon38% of respondents say their economy will get better, while19% believe it will get worse. Respondents in Oman are the most positive about the expected improvements in their country’s economy, with51% stating things will be better. Respondents in Egypt are most pessimistic about their country’s economy a year from now:34% say that it will become worse.
Respondents were also asked what they feel their propensity to consume is, as part of the Propensity to Consume Index (PCI). Morocco and Lebanon recorded the highest increases moving up the index by16.2 and7.9 points respectively. At the other end of the scale, Egypt recorded the largest drop, moving down the index by8.3 points.
Asked whether they would invest in property, the respondents largely agree that they will not. The trend continues from the previous quarter with a majority of respondents (63%) stating they are not interested in making any investment in property. Within Lebanon,72% say they will not be buying any property. Of those wishing to purchase a property,76% say they are likely to opt for a new property.
”People’s expectations of the economy never quite match up to how they expect their own financial situation to change - it’s one of our greatest strengths that we tend to believe that we will outperform” commented Sundip Chahal, Chief Operating Officer of YouGov Siraj.
Another contributor to the CCI is the Employee Confidence Index (ECI), which measures the attitudes of respondents to the local job market, in terms of their satisfaction towards the availability of jobs and their satisfaction with their salary.
Lebanon remained stable moving up the index by0.3 points on this measure, with nearly all other countries registering falls. Showing the biggest decrease is Syria, which moved down the index by19.4 points, followed by Egypt which moved down by7.8 index points. In the Gulf, Kuwait, KSA and Bahrain all moved down the index by7.4,5.5 and0.5 points respectively.
When asked whether they believe more jobs will be available in a year’s time, respondents are roughly divided:29% say more will be available,27% say the job situation will remain the same and30% say the availability of jobs will be worse. In Lebanon,22% believe the availability of jobs will get better while27% of respondents believe the availability of jobs will become worse.
In terms of salaries and whether they have kept pace with the cost of living, as in the previous wave, the majority feel that they have not kept pace with the cost of living, with64% agreeing that there is a disparity, while just19% agree they have increased inline with the cost of living, and5% say they have increased more than the cost of living.
“We conduct our quarterly Middle East Consumer Confidence Index Survey in order to chart how consumer confidence levels are changing as the region goes through different economic cycles, and faces the challenges and pressures wrought by economic trends and events across the globe. This seeks to provide all stakeholders, from regional businesses to local organisations and HR professionals with up-to-date information that is both relevant and reliable as a snapshot of current market trends, concluded Ataya.
Data for the June2010 Consumer Confidence Index Survey was collected online between24 May and13 June2010 with6,211 respondents from the UAE, KSA, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan. Males and females aged over18 years old, of all nationalities, were included in the survey.