UAE consumer confidence slumps in H1
Dubai , May 13, 2009
Consumer confidence in the United Arab Emirates slumped in the six months to April with residents worried about job security fearing the oil exporter faces recession for longer than a year, a survey showed on Wednesday.
The UAE, where the emirate of Dubai is suffering from a real estate crash, was second only to Russia in the drop in consumer confidence, a survey conducted by market research firm Nielsen between March 19 and April 2 showed.
The survey of 26,202 respondents in 52 countries ranked the UAE, the second-largest Arab economy, in 10th place overall for consumer confidence levels but said its ranking fell seven places from the prior survey as economic conditions worsened.
'The consumers here are feeling the heat and the uncertainty in the environment, but they are much better off than other markets,' Nielsen's regional managing director Piyush Mathur told a media briefing of the results.
'The last few months have seen a turn in emerging markets. Everyone is envisaging a contraction in 2009 and the message is getting to consumers. They feel the UAE is in a recession.'
Nielson said 78 per cent of respondents said they thought the UAE economy was in recession, up from only 40 per cent in the last survey. Only one-third of respondents thought the UAE could emerge from recession in the next 12 months.
Out of a possible 200 points, the UAE scored 89 on the consumer confidence index, down from 110 points in the second half of 2008 but still well above the global average of 77 points.
Saudi Arabia scored 79 and Egypt's score stood at 74. Consumer confidence in Russia fell 29 points while Brazil also witnessed a 21 point drop in confidence.
The International Monetary Fund joined regional economists and policymakers in forecasting a contraction in the UAE economy this year, following an economic boom that helped the UAE economy surge about 50 per cent in real terms from 2004 to 2008.
Economic growth prospects across the Gulf region have dimmed since the global financial crisis spread into the region late last year and oil prices collapsed, forcing Opec members including the UAE to slash oil output.
Consumer demand has also taken a beating in Dubai after thousands of people lost their jobs amid a real estate slump that saw residential property prices fall by about half since a peak last year with dozens of new projects cancelled.
Half of the survey respondents in the UAE said they were concerned about future job security, up from 17 percent in the previous survey, Nielson said.
Mathur said more people were putting spare cash into savings and settling loans rather than spending. Retailers in Dubai, home to one mall trumpeted as world's largest and another that boasts a ski slope, have said sales have fallen.-Reuters