The UAE consumer confidence has dropped considerably for the second time this year following what has been an overall bad year in terms of consumer confidence, according to recent research. 

The research conducted by Bayt.com in conjunction with research specialists YouGovSiraj, revealed that the consumer confidence was down 8.2 per cent this year.

A record 68 per cent of the respondents said salaries have not kept pace with living costs, while 35 per cent believe that the economy will become worse by next year, the research said.
 
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 by 0.3 index points followed by Saudi Arabia with a drop of 2.1 index points, and a drop in Bahrain by 4.9 index points.

The North African countries also saw dips, with consumer confidence dropping by 7.6 points in Morocco, 2.7 points in Algeria and 1.9 index points in Egypt. The Levantine countries fared considerably better, with improvements in Syria and Lebanon of 11.4 and 7.9 index points respectively, the research revealed.

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," commented Bayt.com CEO Rabea Ataya.
 
"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," he pointed out. 

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, he explained.

Consumer expectations and optimism towards the future, the survey found, dropped considerably in the UAE, falling by 9.8 points since the previous quarter.

In comparison, Kuwait recorded a marginal dip of 0.3, while Saudi and Bahrain noted decreases of 1.9 and 4 points respectively. Qatar remained the only Gulf country to feel an improvement, with an increase of 2.3 index points.

Optimism for the future remained relatively low with 35 per cent believing their country's economy will deteriorate.

There were general feelings of optimism however regarding how people feel their financial positions would change in a year’s time, with 46 per cent feeling they would be better off.

Most optimistic were residents of Kuwait and Qatar, with 55 per cent and 52 per cent anticipating better finances after a year. The majority of respondents at 40 per cent agreed it was a bad time to buy, which marks a slight increase on the last wave’s 38 per cent.

Across the surveyed countries, Morocco, followed by the UAE, recorded the greatest decreases in the Propensity to Consume Index falling by 11.6 and 5.8 points each.

Syria and Lebanon recorded phenomenal boosts in terms of spending power, moving up the index by 17.4 and 13.2 points as compared to the previous wave.

"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," observed Nassim Ghrayeb, CEO, YouGovSiraj.

"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,” he added.

The research revealed that the employee confidence was markedly down in the majority of the surveyed countries, with Morocco moving down the index by 7.3 points, Algeria and Lebanon each moving down by 6.4 points and Bahrain dipping by 5.8 points.

Syria’s index conversely jumped up by 5.6 points. The UAE fared no better on this index, moving 5.1 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 from 49 to 42 per cent.

“An overwhelming 68 per cent of respondents across the region said salaries haven’t increased with rising living costs, with only 20 per cent finding they have. In the UAE, almost three quarters of people – 72 per cent - said their salary hadn’t kept pace, marking a significant continued increase from the 61 per cent 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.-TradeArabia News Service