UAE Consumer Confidence declined seven index points in the second quarter to a score of 108, according to the latest Nielsen’s Consumer Confidence Index Report. The Nielsen Consumer Confidence Index measures perceptions of local job prospects, personal finances and immediate spending intentions among more than 30,000 respondents with Internet access in 60 countries. The global survey was fielded May 11-29, 2015.
In UAE, sentiment for the three economic indicators decreased, as future job prospects declined four percentage points to 62%, personal finances sentiment decreased three percentage points to 64%, and immediate spending intentions declined 3 percentage points to 47%. 41% of UAE respondents believe they are in recession, as the sentiment increased two percentage points from the first quarter.
Most UAE respondents are in a saving – rather than a spending – mindset as more than two-thirds (70%) say they are actively taking action to save on household expenses compared to a year ago. Among those who say they are taking actions to save, the top two areas earmarked for reduction are spending on clothing (50%) and spending less on take-out meals (46%).
The fear of losing a job (26%) is top concern in UAE. Furthermore, parent’s welfare and happiness (11%) is also a key issue as well as worries about the state of the economy and a balanced work / life style (both 9%).
“In the United Arab Emirates, job security concerns are amplifying as lower oil prices can fuel expectations of government spending cuts,” said Arslan Ashraf, managing director, Nielsen Arabian Peninsula. “Additionally, two key sectors of the economy — real estate and tourism — are showing signs of softening. As such, consumers are saving more and spending less, intending to pull back spending on new clothes, out-of-home entertainment and home improvements expenses.”
CONFIDENCE DECLINES IN SAUDI ARABIA AND EGYPT AS WELL
Consumer Confidence decreased in three of five countries measured in the Middle East/Africa region and held steady in two in the second quarter. At 108, the United Arab Emirates (UAE) had as mentioned before the highest index in the region, but it decreased seven points from the first quarter—the biggest quarterly decline in six years. Confidence declined five points in Egypt to 85 and two points in Saudi Arabia to 105. Confidence levels in Pakistan (102) and South Africa (87) were unchanged from the first quarter.
Regionally, while sentiment about job prospects edged up one percentage point to 45%, personal finances sentiment declined two percentage points to 58%, and immediate spending intentions declined three percentage points to 36% from the first quarter. Recessionary sentiment increased in four of five Middle East/Africa markets: Egypt and South Africa each increased three percentage points to 82% and 73%, respectively, and Saudi Arabia and the United Arab Emirates – as mentioned before – increased two percentage point to 45% and 41%, respectively.
Regionally, quarter-on-quarter discretionary spending and saving intentions changed marginally across most lifestyle categories. Intentions to save declined two percentage points to 37%, but plans to invest increased two percentage points to 12%. Paying debts was the priority for 22% of respondents, an increase of three percentage points, and spending on new clothes (27%) and holidays/vacations (19%) increased one percentage point each from the first quarter.