MasterCard Worldwide Index of Consumer Confidence Survey: UAE Only Country in Survey To Demonstrate Increased Consumer Confidence
Global Economic Circumstances Likely Impacting Outlook in Gulf Markets
MasterCard Worldwide today announced its latest MasterCard Worldwide Index of Consumer Confidence findings for the second half of 2008 for key markets across South Asia, Middle East and Africa (SAMEA). The Index revealed that consumer confidence in the United Arab Emirates (UAE) has increased and going strong at 85.4, the only country among those surveyed to have an increase in consumer confidence. Overall consumer confidence across the Middle East & Levant (ME&L) has slightly decreased, likely influenced by the global economic slow down, sub prime crisis, increasing oil prices and rising inflation.
Commissioned by MasterCard Worldwide and conducted bi-annually in select markets in SAMEA, the survey analyses consumers’ perceptions of economic conditions over the six months ahead. The scores, ranging from 0 to 100, are based on responses on five variables: employment, economy, regular income, stock market and quality of life. A score of 50 represents the mid-point. A score above 50 indicates that consumers are optimistic about the economic climate, while a score below 50 signals that consumer are pessimistic about the economic situation. The markets surveyed are the UAE, Egypt, Kuwait, Lebanon, Qatar, Saudi Arabia, India and South Africa.
The current UAE Index score of 85.4 out of a possible score of 100 increased from 78.5 six months ago. Indications for the UAE are that consumer sentiment is overall positive and optimistic.
In the latest survey, the Index reveals that this market has picked up from and can be compared to the confidence level from a year ago (88.8). Scores for most of the key indicators increased with a significant improvement in consumer sentiments on Regular Income at 90.7, an increase of 20.4 points from 70.3 in the first half of 2008. Sentiment on Employment sharply increased to 95.8 as compared to 85.6 in the first half of 2008, as well as Quality of Life with an Index score of 85.3 as compared to 75.9 in the first half of 2008. Sentiment on Stock Market has declined from 73.4 in the first half of 2008 to 65.2 in the current survey.
In the Middle East and Levant (ME&L), the UAE ranked third in consumer confidence with Kuwait (89.4) and Qatar (88.6) currently ranked in first and second position. On a market basis, the UAE sees an increase in confidence with an Index score of 85.4 vs. 78.5 six months ago. Consumers in Kuwait remain highly optimistic but a little less so than six month ago (89.4 vs. 93.3). However, it still tops the list with the highest consumer confidence. Qatar, which was surveyed for the first time, comes second with an Index score of 88.6. India (82.1 vs. 86.6 six months ago) ranks fourth, followed by Saudi Arabia (80.1 vs. 92.2 six months ago), South Africa (74.3 vs. 83.7 six months ago), Egypt (32.3 vs. 65.9 six months ago) and Lebanon (32.0 vs. 38.7 a period ago).
Denzil Lawson, General Manager, Middle East and Levant, MasterCard Worldwide said, “We are pleased to announce the MasterCard Worldwide Index of Consumer Confidence for the second half of 2008. The results indicate that consumer confidence across the Gulf States is still going strong despite an overall decrease in this survey. With the addition of Qatar to this survey, MasterCard continues its commitment to be a source of knowledge for its customers, associates, and merchants as they grow their businesses across the region.”
He continued “The Index of Consumer Confidence is a credible, tried and tested barometer for historical consumer sentiment trends and analysis. When leveraged as a barometer of consumer sentiment, the Index provides valuable understanding in shifts in consumer sentiments, as well as the identification of market trends over time. With the survey being one of the region’s most comprehensive assessments of consumer sentiment, we are confident that the results will continue to deliver comprehensive information that will help both the private and public sectors in their decision making and strategic planning.”
The overall confidence across ME&L decreased from 73.6 in the first half of 2008 to 66.4 in the current survey. Since this MasterCard knowledge leadership initiative was introduced in 2004, overall consumer confidence in ME&L has increased steadily from the first score of 66.1 (2004) and its current historical average of 77.2.
The SAMEA Region as a group of markets (70.6) remains fairly optimistic about the next months even though the consumer sentiments are slightly weaker than a period ago (78.4), a year ago (79.3) and its Historical Average (76.4). SAMEA consumers are now less optimistic than a period and a year ago on Employment (73.0 vs. 82.8 six months ago), Economy (71.4 vs. 82.6), Regular Income (77.6 vs. 81.7) and Stock Market (61.8 vs. 78.0). They maybe slightly more upbeat on Quality of Life (69.3 vs. 66.7) but they are less positive than they were a year ago (75.3). They are also less exuberant about the Stock Market, Regular Income and Economy than they had generally been in the past.
2H 2008 MasterCard Worldwide Index of Consumer Confidence – SAMEA Highlights
United Arab Emirates – Index 85.4
Consumer confidence in this market (85.4) has picked up compared to the result of the last survey (78.5). A significant improvement in consumer sentiments on Employment (95.8 vs. 85.6 Period Ago), Regular Income (90.7 vs. 70.3 Period Ago) and Quality of Life (85.3 vs. 75.9 Period Ago) is evident. However confidence in the Stock Market (65.2 vs. 73.4 Period Ago) has declined even though consumers seem to be slightly optimistic.
UAE 2H 2008 PREVIOUS INDEX SCORES
VARIABLES RATED BY RESPONDENTS OPTIMISTIC
(%) NEUTRAL (%) PESSIMISTIC (%) INDEX
SCORE 1H
2008
2H 2007 1H 2007 2H 2006 1H
2006 2H 2005 1H 2005 2H 2004
EMPLOYMENT 57.4 40.1 2.5 95.8 85.6
95.2 79.0 77.4 69.5 90.5 82.3 84.3
ECONOMY 59.4 34.0 6.7 89.9 87.1
96.0 85.7 84.5 90.0 97.9 90.7 95.6
REGULAR INCOME 43.1 52.5 4.4 90.7 70.3
92.2 78.4 77.1 91.3 98.9 89.4 90.1
STOCK MARKET 37.4 42.6 20.0 65.2 73.4
81.5 76.5 74.6 74.7 88.2 84.1 79.8
QUALITY OF LIFE 53.0 37.9 9.1 85.3 75.9
79.1 80.6 74.0 65.0 89.1 68.3 85.6
INDEX OF CONSUMER CONFIDENCE 85.4 78.5
88.8 80.0 77.5 78.1 92.9 83.0 87.1
Egypt - Index 32.3
Since the record high consumer confidence of a year ago (94.3), consumer confidence in Egypt has declined very significantly six months ago (65.9) and even more so in the current Index ranking (32.3).
Consumers are pessimistic on all five economic factors especially Employment (26.3 vs. 79.2 Period Ago and 94.6 Year Ago); Economy (29.9 vs. 87.2 Period Ago and 97.5 Year Ago); Stock Market (33.0 vs. 79.0 Period Ago and 92.4 Year Ago) and Quality of Life (27.0 vs. 19.5 Period Ago and 90.6 Year Ago). Sentiments on Regular Income (45.2 vs. 64.5 Period Ago vs. 96.5 Year Ago) are less negative but are still slightly pessimistic.
India - Index 82.1
Consumers in India remain rather to very optimistic on all five economic factors (Employment 75.1; Economy 80.9; Regular Income 87.0; Stock Market 79.8 and Quality of Life 87.7). The overall Index score of 82.1, though slightly less optimistic than six months ago (86.6) is well ahead of the Index score one year ago.
Kuwait - Index 89.4
Consumers in Kuwait remain highly optimistic but a little less so than most if not all preceding measurements due to the significant decline in Quality of Life expectations (66.7 vs. 91.0 Period Ago vs. 93.3 Year Ago).
Consumers remain highly optimistic on Employment 98.2; Economy 95.5; Regular Income 94.3 and Stock Market 92.2 but their Quality of Life expectations (66.7) for the next six months have come off significantly from their usual previous highs (91.0 Period Ago; 93.3 Year Ago etc)
Lebanon - Index 32.0
Overall consumer confidence in this market (32.0) currently remains pessimistic and at a similar confidence level of six months ago (38.7) and a year ago (38.6) and is well below the market’s historical average (45.5). Consumers are pessimistic on all five economic factors: Employment (26.3), Economy (34.7), Regular Income (27.8), Stock Market (28.5) and Quality of Life (42.6).
Qatar - Index 88.6
Consumers in this market are very highly optimistic about Employment (98.8), Economy (91.7), Regular Income (94.5) and Quality of Life (94.8). They are however, only just somewhat optimistic about the Stock Market (63.0).
Overall, very strong consumer confidence (88.6) prevails and makes this market comparable to consumer confidence levels in Kuwait, the UAE and Saudi Arabia.
Saudi Arabia - Index 80.1
Consumers in Saudi Arabia remain very optimistic about the next six months (80.1) but they are less so now than they were in seven of its eight preceding measurements.
Consumers remain very optimistic on Employment (91.8), Economy (85.0), Regular Income (90.1) and Quality of Life (82.3). However, confidence in Stock Market (51.6 vs. 94.4 Period Ago and 89.8 Year Ago) has dropped precipitously from high optimism.
South Africa - Index 74.3
Overall consumer confidence (74.3) has declined somewhat significantly from six months ago (83.7), a year ago (80.7) and from the market’s Historical Average (80.1). Consumers remain highly optimistic on Regular Income (87.0 vs. 89.0 Period Ago vs. 89.3 Year Ago) but their sentiments on the remaining four economic factors have generally waned significantly though still rather positive: Employment 72.9 vs. 81.9 Period Ago vs. 81.2 Year Ago; Economy 70.5 vs. 81.9 vs. 88.2; Stock Market 69.8 vs. 83.0 vs. 66.8 and Quality of Life 71.2 vs. 82.9 vs. 77.9.
SAMEA 2H 2008 PREVIOUS INDEX SCORES
VARIABLES RATED BY RESPONDENTS OPTIMISTIC
(%) NEUTRAL (%) PESSIMISTIC (%) INDEX
SCORE 1H 2008
2H 2007 1H 2007 2H 2006 1H 2006 2H 2005 1H 2005 2H 2004
EMPLOYMENT 47.5 34.9 17.6 73.0 82.8 77.2 79.6 78.6 70.7 73.5 63.2 57.1
ECONOMY 42.7 40.2 17.1 71.4 82.6 82.3 80.6 82.6 76.7 79.3 69.6 64.0
REGULAR INCOME 42.5 45.1 12.3 77.6 81.7 87.7 84.2 86.8 85.6 86.7 80.2 78.5
STOCK MARKET 34.9 43.5 21.6 61.8 78.0 74.2 79.7 81.4 75.9 79.0 73.3 65.9
QUALITY OF LIFE 44.0 36.5 19.5 69.3 66.7 75.3 77.3 81.8 72.4 76.9 62.9 63.7
INDEX OF CONSUMER CONFIDENCE 70.6 78.4 79.3 80.3 82.2 76.3 79.1 69.8 65.8
NOTE TO EDITORS: This news release is distributed with an accompanying chart (see above) that shows the current MasterCard Worldwide Index of Consumer Confidence scores by market compared with several significant points in the history of the survey.
More information on the Index can be found on the website www.masterintelligence.com.
About MasterCard Worldwide Index of Consumer Confidence
The MasterCard Worldwide Index of Consumer Confidence is the only one of its kind in the SAMEA region and has been conducted on a bi-annual basis since 2004. A similar survey has been conducted in the Asia/Pacific region for the last 14 years and has proved to be an important barometer of consumer sentiment.
The MasterCard Worldwide Index of Consumer Confidence is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. The MasterCard Worldwide Index of Consumer Confidence is the Mean Score of the Five Relative Indices. The Relative Indices measure the relative optimism of the respondents in Employment, Economy, Regular Income, Stock Market and Quality of Life. The Relative Indices are computed using the percent of optimistic replies divided by the percent of optimistic and pessimistic replies multiplied by 100. Using this method of computation, the Relative Indices will always be 50 if there are as many optimistic replies as pessimistic replies. The possible score ranges from 0 (most pessimistic) to 100 (most optimistic) with 50 denoting a situation of neutrality or implies no significant change is anticipated in consumer confidence over the next six months.
This information relates to consumer perceptions on economic trends only and does not constitute a projection of the business or financial performance of MasterCard Incorporated or its affiliates.
MasterCard Worldwide Index of Consumer Confidence - Respondent Base
The survey was designed to gauge the perceptions of people who have the experience and means of engaging in a wide spectrum of activities which dictate the performance of the national economy. Thus respondents were amongst the ‘banked’ population (i.e., to have at least a savings account, or a home/auto loan, a plastic payment or ATM card) and were between the ages of 18-64. Data collection was conducted via personal and telephone interviews with the questionnaire translated to the local language wherever appropriate and necessary. The survey has a margin of sampling error of plus or minus four percentage points at the 90% confidence level.
About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 18 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.
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