MasterCard survey reveals consumer confidence impacted by concerns over employment

While confidence is lower, overall results show that UAE consumers are still optimistic about Regular Income, the Economy and Quality of Life in the six months ahead. In line with the latest Index, MasterCard has also launched the inaugural MasterCard Worldwide Index of Consumer Purchasing Priorities.

The MasterCard Worldwide Index of Consumer Confidence and MasterCard Worldwide Index of Consumer Purchasing Priorities are based on consumer surveys conducted by MasterCard across seven markets in the Middle East and Africa. A total of 3,200 consumers were surveyed between 14 October and 11 November 2008. Data collection was via personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The Index and its accompanying reports do not represent MasterCard financial performance.

The long running MasterCard Worldwide Index of Consumer Confidence, now in its 5th year and released twice a year; provides information on consumer sentiment across the region. The Index is based on a survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

In the UAE, the current consumer confidence score of 75.4, is a drop from a period ago [85.4] and a year ago [78.5]. It is also below the market historical average [83.5]. However, consumers remain highly optimistic especially about Regular Income [91.6], the Economy [83.2] and Quality of Life [76.7]. They are somewhat more optimistic about the Stock Market [68.3] than they were a period ago [65.2] and year ago [73.4]. Consumer outlook on Employment [57.0] though still positive has seen a significant drop, from 95.8 a period ago and 85.6 a year ago; representing the lowest index score for measurement for Employment in the UAE since the beginning of the Index in 1H 2004.

The new MasterCard Worldwide Index of Consumer Purchasing Priorities, which will be also released twice a year, provides valuable insights into consumers' savings and expenditure behavior and their discretionary spending priorities for the six months ahead.

"In spite of the severe global credit crisis, the GCC markets are in a strong position to weather the economic storm,"

said Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide.

He further observes that "in the short term, GCC governments have the financial wherewithal to provide the necessary fiscal stimulus to support continuing economic growth to mitigate the worst of the global impact; but more importantly, the investment made in recent years in infrastructure and capacity building will bear fruit in the coming years and decades. The question of whether GCC markets may suffer from a technical recession in 2009 is not the critical issue; the fact today is that their economies are grounded on a much more robust and sustainable foundation than ever before."