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More of UAE consumers reckon economy is on the mend: report

Sharp gains in confidence on job prospects and personal finance, Nielsen survey shows.

More UAE consumers are starting to shed their financial concerns, suggesting that there is a marked improved on the job prospects side and in their personal finances, as part of a global survey by the consultancy Nielsen. And with a score of 109 - an improvement of five points over the first quarter reading - consumer confidence in the UAE outstrips the global average of 98.

While 48 per cent still believe the local economy is going through a recession, there was a 9 per cent drop from the first quarter numbers to the same question. Another 35 per cent are of the opinion that the country will emerge out of recession. (But the situation in the job market and the economy remain top concerns over the next six months, With this spike in confidence, they are now more likely to spend on products other than part of their daily requirements compared with the sentiments they had in the first quarter. But any spending gains will be strictly within bounds. For UAE’s retailers, it means they will have to wait for a while yet to get the full benefits. (But even on this score, more UAE consumers are willing to set aside more of their spare cash on buying gadgets and on their fashion choices than was the case earlier.) “Market dynamics have not changed significantly, and consumers were cautiously optimistic about spending intentions,” said Arslan Ashraf, Managing Director, Nielsen Arabian Peninsula and Pakistan. “They continue to be prudent with their expenses, especially when it comes to spending on new clothes, out-of-home entertainment and out-of-home dining.”

But it is on the job market and personal financing that residents’ sentiments were more bullish. “Confidence in the UAE increased five index points in the second quarter after a four-point index decline at the start of the year amid an environment of volatile global oil prices,” said Ashraf.

Job prospects sentiment improved by a significant nine percentage points (60 per cent favourable), while for personal finance sentiment it was even brighter, improving six percentage points (68 per cent favourable).

The upbeat mood among the majority of the respondents ensured the UAE reversed a four-point decline in the first quarter with a five-point increase to 109, making it the highest in the Africa/Middle East region.

The Nielsen Consumer Confidence Index is updated quarterly in 63 countries to measure the perceptions of local job prospects, personal finances, immediate spending intentions and related economic issues of real consumers around the world. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

Worldwide, as has been made amply clear by economic numbers coming out, consumer sentiments in North America recorded a growth momentum in the second quarter with a three-point confidence increase to 111. US consumer confidence maintained positive momentum in the second quarter, increasing three points to 113 from the previous quarter.

But in Asia-Pacific, confidence levels remained stable at 107, at a one-point decrease from the first quarter. But in Japan, there was a noticeable drag, dropping four points to 69, making it the fourth consecutive quarter of declining scores, amid weak consumption and wage growth.

But China’s score was on the mend, gaining a point to 106.

Source: Gulf News

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