29/07/2015 07:52 AST
Consumer confidence in the UAE has declined seven index points in the second quarter to a score of 108, according to the latest Nielsen's Consumer Confidence Index Report.
Despite the decline from the first quarter, the consumer confidence level remains the highest level in the Middle East and Africa (MEA).
In the UAE, sentiment for the three economic indicators decreased, as future job prospects declined four percentage points to 62 per cent; personal finances sentiment decreased three percentage points to 64 per cent; and immediate spending intentions declined three percentage points to 47 per cent. 41 per cent of UAE respondents believe they are in recession, as the sentiment increased two percentage points from the first quarter.
"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."
Most UAE respondents are in a saving, rather than a spending, mindset as more than two-thirds (70 per cent) 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 per cent) and spending less on take-out meals (46 per cent).
The fear of losing a job (26 per cent) is the top concern in the UAE. Furthermore, parent's welfare and happiness (11 per cent) is also a key issue, as well as worries about the state of the economy and a balanced work/lifestyle (both nine per cent). Elsewhere, 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 per cent, personal finances sentiment declined two percentage points to 58 per cent, and immediate spending intentions declined three percentage points to 36 per cent 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 per cent and 73 per cent, respectively, and Saudi Arabia and the UAE increased two percentage point to 45 per cent and 41 per cent, 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 per cent, but plans to invest increased two percentage points to 12 per cent. Paying debts was the priority for 22 per cent of respondents, an increase of three percentage points, and spending on new clothes (27 per cent) and holidays/vacations (19 per cent) increased one percentage point each from the first quarter.
Khaleej Times
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