UAE consumers feel the country is now driving in the recovery lane
• 43% consumers in the Nielsen Global Consumer Confidence Index survey expect the recession to be over before the middle of next year
• Residents and businesses welcome the drop in Dubai’s property and rental prices
• Job security still a concern with most consumers despite general optimism
A study released by Dubai Chamber of Commerce & Industry shows the consumer confidence in the UAE economy has risen as they start to embrace the idea of an economic recovery while another study indicated that the fall in Dubai’s property prices and rental costs has come to the relief of many residents and businesses alike.
The study derived from the Nielsen Global Consumer Confidence Index survey revealed that following a record low in March, consumer confidence levels have risen as almost half of consumers surveyed expected the country to emerge from the current downturn in the next 12 months. A total of 87% of consumers questioned in survey said they believed they are in an economic recession of which 45% are confident the country will emerge from it in the next year, a 13% hike from the company's last survey in March.
The survey suggests that consumer confidence in the UAE rose 4 index points to 93 in June (out of a possible 200 points), from 89 in the last survey conducted in March (figure 2), though still down from 110 points in the second half of 2008. However, despite the rise in confidence, UAE consumers remained cautious about job security, with the state of the economy weighing on their spending habits.
According to the Nielsen survey, in March 2009, 32% of UAE consumers thought the recession would be over within a year but in June 2009, 43% said they expected the recession to be over before the middle of 2010. Positive economic news and growing consumer optimism in the past few months have without doubt led consumers in the UAE to believe that economic recovery will come sooner rather than later. This has led to the UAE now being ranked the seventh most optimistic country in the survey.
HE Eng Hamad Buamim, Director General, Dubai Chamber, maintained that these findings affirm the belief that the country is on the path to recovery. The consumer confidence in the economic recovery is a strong indicator that the worst is over. Meanwhile, the overall decline in rental and property prices has definitely improved the Emirate’s business competitiveness as Dubai’s exports in the second quarter registered a rise as did the number of exporters. All these are tell-tale signs of the economic recovery which will soon come around – it’s only a matter of time, said Buamim.
