UAE records a significant drop in consumer confidence, latest Bayt.com and YouGovSiraj figures reveal

Consumer confidence has also dropped across the GCC region, dipping by 7 index points in Qatar and 3 points in Saudi Arabia and Kuwait, as compared to levels measured in January of this year. Of the surveyed North African countries, Egypt also noted a dip in confidence dropping 8 points, while Algeria witnessed a marked improvement, moving up 2 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 that 34% 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 by 11 points in Qatar and 6 points each in the latter two. Kuwait by comparison remained relatively stable in terms of consumer expectations. All respondents remain optimistic that their country's economy would be better in a year's time - with respondents in Oman and Bahrain at 48% and 44% 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 - only 19% of all correspondents cited it as a good time to buy and 38% consider it bad. The most marked decrease in the index was the UAE - dropping by 18 points followed by Egypt, which dropped 12 points. Saudi Arabia marked a slight improvement, suggesting consumer spending behaviour could improve in the Kingdom.

The significant drop in the UAE could be a potential opportunity for marketers participating in the forthcoming Dubai Summer Surprises. Since consumers will be on the lookout for better bargains and offers, the brands that propose more attractive promotions and discounts would stand to gain.

"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 Qatar and KSA falling by two points and a point respectively, while Kuwait and Algeria both registered an improvement with their indices moving up 5 points each. Most notably, the UAE dropped 4 points - with 49% of respondents citing it as a good period conducive to business and 50% citing it a good time in terms of the availability of jobs in the U.A.E. Qatar and Oman recorded the most positive attitudes towards current business conditions.

The research also indicates respondents' satisfaction in terms of their work remuneration: only 19% of all respondents cited that their salary had increased to keep pace with the cost of living, while an overwhelming 63% stated that their remuneration had not kept up - this figure was 61% in the UAE, as compared to the 51% registered in January's results. The most unsatisfied in this respect were respondents in the Levant countries of Jordan, Syria and Lebanon.

"At an overall 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. The UAE's optimism along this front dropped considerably from January's results of 58% to 51% in May. 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, while offering a valuable driver for prompting positive change," concludes Ataya.

The data for the May 2008 Consumer Confidence Index Survey was collected online between the period of 7th April and 18th May 2008 with 13,026 respondents across the UAE, KSA, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan. Males and females aged between 20 and 62, of all nationalities, were included in the survey.