Consumers in the UAE are losing hope on major economic indicators, and emerged more pessimistic about the five parameters of economy, employment, stock market, regular income and quality of life in the second half of 2011 as compared with the first half of 2011.
These are the findings of a just published MasterCard survey of consumer confidence in the Middle East, with UAE consumers emerging the most pessimistic (barring consumers in strife-struck Lebanon) on future outlook among the other Middle Eastern countries covered in the survey.
The latest MasterCard survey shows UAE consumers registered a score of 82.1 in the second half of 2011, down from a high of 92.9 in the first half of last year.
The MasterCard Worldwide Index of Consumer Confidence is based on a survey conducted between December 5, 2011, and February 8, 2012, of 12,915 respondents aged 18 to 64 years in 25 countries within Asia/Pacific, Middle East and Africa.
The index is now in its 20th year in Asia/Pacific and its 9th year in the Middle East and Africa. It is based on a survey which measures consumer confidence on prevailing expectations in the market over the next six months, based on five economic indicators: economy, employment, stock market, regular income and quality of life. The Index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.
While consumers in the UAE remain optimistic in their attitudes towards all five indicators, data shows that that optimism is waning. Numbers show a drop in confidence on all parameters: quality of life (89.3 vs. 93.6 in previous index), and regular income (85.7 vs. 93.8), economy (84.4 vs. 93.7), employment (82.2 vs. 91.4) and the stock market (69.0 vs. 92.1).
The survey highlighted that female respondents (83.2) tend to be more optimistic about their prospects for the coming months than their male counterparts (81.5) and that consumers under the age of 30 (82.3) are more optimistic than respondents over the age of 30 (82.0).
“We are pleased to see that the UAE has shown consistently strong consumer confidence scores for the last few years, as consumers in the market remain optimistic about all indicators measured. Led by the strong performance of the retail and hospitality sectors, in particular, the market sentiment in the UAE is becoming increasingly upbeat and this is encouraging news for the business community,” said Raghu Malhotra, division president, Middle East and North Africa, MasterCard Worldwide.
In the Middle East, the consumer confidence score of 85.7 is not only an increase as compared to six months ago (82.8), but consumer confidence levels are at a record high since the Index was launched in the region in 2004.
Respondents indicated an increase in confidence levels for four of the five indicators as compared to six months ago, and were most optimistic about regular income (91.3 vs. 86.3).
Consumers in the Middle East were also very optimistic about quality of life (87.6 vs. 81.5), economy (86.5 vs. 82.5) and employment (85.5 vs. 82.9). Despite witnessing a slight decrease in confidence levels, consumers remain optimistic about the stock market (77.8 vs. 81.0). The Middle East’s aggregate score of 85.7 also remains substantially higher than that of Asia/Pacific (52.1) and Africa (73.8).
Among other findings in the Middle East:
• Consumer confidence is highest in Qatar and Oman with scores of 93.6.
• Lebanon witnessed an extreme improvement in its consumer confidence score as compared to six months ago, increasing from 24.1 to 70.5.
• All markets surveyed across the Middle East reflected positive levels of consumer confidence, with scores of 70 or higher.