Consumer confidence has witnessed a decline in Saudi Arabia dropping by3 index points, according to recent research conducted by the Middle East’s number one job site - Bayt.com in conjunction with research specialists YouGovSiraj. Consumer confidence has also dropped across the entire GCC region, dipping by9 index points in the UAE and3 points in Kuwait, as compared to levels measured in January of this year. Of the surveyed North African countries, Egypt also noted a dip in confidence dropping8 points, while Algeria witnessed a marked improvement, moving up2 points.
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.
One aspect of determining the CCI is to assess whether respondents’ current financial position is perceived to be better – or worse – than the previous year. The research reveals that34% of all respondents feel that they are in a better position than last year.
The drop from previous scores in terms of consumer expectations and optimism towards the future was most notable in Qatar, the UAE and Egypt, dropping by11 points in Qatar and6 points in the latter two. Kuwait by comparison remained relatively stable in terms of consumer expectations, while KSA noted a minor improvement. All respondents remain optimistic that their country’s economy would be better in a year’s time – with respondents in Oman and Bahrain at48% and44% respectively registering as the most optimistic.
As part of the index, the respondents were asked to rate how they found the current economic climate in terms of good, neutral or bad, for buying consumer goods. The conclusive results were largely negative – only19% of all correspondents cited it as a good time to buy and38% consider it bad. Saudi Arabia marked a slight improvement, suggesting that consumer spending behaviour could improve throughout the Kingdom, while Qatar and Kuwait both dropped by10 points in the index. The UAE showed the most marked decrease – dropping by18 points followed by Egypt, which dropped12 points.
The fact that Saudi Arabia has improved slightly in terms of willingness to spend sends signals to marketers that there is potential for encouraging consumers, through the use of strong marketing campaigns, to purchase the goods and services that they felt they couldn’t previously afford.
"Consumer opinion is one of the most powerful tools in reflecting prevailing attitudes and sentiments about the current business and economic conditions in a particular country. By monitoring this data, all types of industry and professional personnel can learn and benefit from these sound insights, by using them to forecast and understand key trends and improve and develop business activities correspondingly in the future,” says Bayt.com’s CEO, Rabea Ataya.
The consumer confidence index also seeks to measure the confidence of employees in their current work, and to measure their individual attitudes and satisfaction towards the local job market in general. Employee confidence recorded minor slumps in KSA and Qatar, falling by2 points and a point respectively, with almost half of KSA’s workers citing it as a good time to do business at48%, and38% stating they felt there were plenty of jobs available in Saudi Arabia. Kuwait and Algeria both registered an improvement in employee confidence, with their indices moving up5 points each. Most notably, the UAE dropped4 points, while Qa tar and Oman recorded the most positive attitudes towards current business conditions.
The research also indicates respondents’ satisfaction in terms of their work remuneration: only19% of all respondents cited that their salary had increased to keep pace with the cost of living, while an overwhelming63% stated that their remuneration had not kept up – this figure was66% in KSA, a slight increase as compared to the65% registered in January’s results. The most unsatisfied in this respect were respondents in the Levant countries of Jordan, Syria and Lebanon.
“On a universal 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. This could put pressure on premium brands as consumers seek out better value propositions. 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,” says Nassim Ghrayeb, CEO, YouGovSiraj.
“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, suggesting prevailing attitudes that jobs in the region are becoming harder to come by. KSA’s optimism in this regard witnessed a drop of2% from January’s results to48%. The same trend was noticed in all of the other surveyed GCC countries,” he added.
“Stakeholders in the HR industry and pan-regional recruitment websites like Bayt.com can greatly benefit from data such as this, as it provides detailed insights into how the people of the region are really feeling about the situation in their country. Specifically, this timely and relevant data helps all involved in the recruitment industry understand how people are feeling about their jobs, career growth potential and salary levels, and offers a valuable driver for prompting positive change,” concludes Ataya.
The data for the a May2008 Consumer Confidence Index Survey was collected online between the period of7th April and18th May2008 with13,026 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. The survey and other Middle East Human Resources research is available on www.bayt.com.