Consumer Confidence has dropped considerably for the second time this year in the UAE falling8.2 points, following what has been an overall bad year in terms of consumer confidence, according to recent research conducted by the Middle East’s number one job site - Bayt.com in conjunction with research specialists YouGovSiraj.
Countries around the GCC region however fared relatively better than the UAE in terms of consumer confidence, with an increase of three index points in Kuwait, with minor decreases in Qatar by0.3 index points followed by KSA with a drop of2.1 index points, and a drop in Bahrain by4.9 index points. North African countries also saw dips, with consumer confidence dropping by7.6 points in Morocco,2.7 points in Algeria and1.9 index points in Egypt. The Levantine countries fared considerably better, with improvements in Syria and Lebanon of11.4 and7.9 index points respectively.
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.
“The way to find out how people are truly feeling about the current business and economic conditions in a particular country is through gaining insights into consumer opinion. In conducting surveys such as these on a periodical basis, it is possible to compare current attitudes and how they change over a particular period, which provides a sound basis for all HR professionals and industry stakeholders to understand key economic trends, and develop business strategies that will work in the changing business environment,” commented Bayt.com’s CEO, Rabea Ataya.
The CCI is ascertained in part by seeking to find whether the respondents feel that their current financial position is either better, or worse than the previous year. The results of the July survey indicate generally negative responses, with only31% of all respondents feeling that they are in a better position than last year. An equal number however felt that they were in a worse position than last year.
Consumer expectations and optimism towards the future, the survey found, dropped considerably in the UAE, falling by9.8 points since the previous quarter. In comparison, Kuwait recorded a marginal dip of0.3, while KSA and Bahrain noted decreases of1.9 and4 points respectively. Qatar remained the only Gulf country to feel an improvement, with an increase of2.3 index points.
Optimism for the future in terms of their country’s economy remained relatively low from respondents across all countries, with35% believing their economy will deteriorate. There were general feelings of optimism however regarding how people feel their financial positions would change in a year’s time, with46% feeling they would be better off. Most optimistic were residents of Gulf states Kuwait and Qatar, with55% and52% anticipating better finances after a year in addition to55% of Pakistan’s respondents.
The index additionally reveals how respondents rate the current economic climate in terms of whether it’s a good, neutral or bad time for buying consumer goods. The majority of respondents at40% agreed it was a bad time to buy, which marks a slight increase on the last wave’s38%. Across the surveyed countries, Morocco, followed by the UAE, recorded the greatest decreases in the Propensity to Consumer Index falling by11.6 and5.8 points each. Syria and Lebanon recorded phenomenal boosts in terms of spending power, moving up the index by17.4 and13.2 points as compared to the previous wave. That Syria and Lebanon showed such marked improvements may indicate the greater political, economic and social stability actuated recently.
“While the Consumer Confidence Index is a lagging indicator and does not necessarily predict economic performance it does reflect the mood of consumers in the market place. This inevitably has some impact on the choices that these consumers make as to the products they buy and the places they shop, and highlights which purchases they deem to be optional. While intentions to buy have not dropped significantly, what we are likely to see are people making choices based on value: the winners will be brands that have developed strong bonds with their customers and those that offer better value for money,” said Nassim Ghrayeb, CEO, YouGovSiraj.
Attitudes and confidence levels of employees towards work and the local job market are assessed as part of the CCI. Employee confidence was markedly down in the majority of the surveyed countries, with Morocco moving down the index by7.3 points, Algeria and Lebanon each moving down by6.4 points and Bahrain dipping by5.8 points. Syria’s index conversely jumped up by5.6 points. The UAE fared no better on this index, moving5.1 points down the index - most likely attributable to dwindling job prospects and limited chances of career growth. Moreover in the UAE, feelings about the conduciveness of the current period to business dropped since the last wave from49% to42%.
“In conducting this research, we can learn how people feel about their current salaries, which provides some very telling indicators: an overwhelming68% of respondents across the region said salaries haven’t increased with rising living costs, with only20% finding they have. In the UAE, almost three quarters of people –72% - said their salary hadn’t kept pace, marking a significant continued increase from the61% of respondents in April’s survey. Interestingly, it was respondents in the Levant countries of Jordan, Syria and Lebanon again that were hardest hit by salary vis-à-vis cost of living,” explained Ataya.
Respondents’ feelings as to whether or not they felt more jobs would be available in the future were generally optimistic, with36% stating that more jobs would be available in a year’s time. Qatar and the UAE were the most positive in this regard at57% and49%, compared to just21% of Egypt’s respondents who felt more jobs would be available. The Gulf countries were among the most optimistic in terms of improved business conditions for the year with56% of Oman’s and Qatar’s respondents,51% of KSA’s respondents and49% of the UAE’s and Kuwait’s respondents feeling conditions will be better.
“All types of stakeholders - from recruitment industry professionals and organisations like Bayt.com to major industry leaders look to this type of relevant and beneficial quantitative data to determine a clear picture of people’s true feelings on the current economic situation in their country of residence. Offering insights into work - including career growth potential, remuneration and general sentiments towards the prevailing environment as the consumer confidence index does, allows for all players to understand where and how improvements can be made, for ensuring a better future – especially in challenging economic times,” concluded Ataya.
The data for the June/July2008 Consumer Confidence Index Survey was collected online between the period of19th June and7th July2008 with13,792 respondents across the UAE, KSA, Qatar, Oman, Kuwait, Bahrain , Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan. Males and females aged between20 and62, of all nationalities, were included in the survey.