Positive sentiment is running deeper among consumers in Dubai with personal finances improving and more people are willing to put their spare cash into savings and holidays, shows the quarterly consumer confidence survey conducted by the Department of Economic Development (DED).
The Consumer Confidence Index for the second quarter of 2014 show optimism prevailing for the fifth quarter in a row even when it remained at 143 points, same as the previous quarter. Job security and salary levels remaining unchanged are concerns for a significant number of consumers but 81% of the consumers rated current job prospects as excellent/good while 93% see improvements in the next 12 months.
Personal finance estimates are brighter with 81% of the consumers having a positive outlook currently and 92% in the next 12 months. Apparently, more than half of the consumers are putting their spare cash into savings and holidays buoyed by the expectations of stable finances and 35% of them are likely to make such spending in the next 12 months.
“The most notable pointer in consumer confidence levels seen in the last few quarters is stability gaining ground and optimism remaining unabated. With Dubai now maintaining a steady economic momentum and focus on sustainable growth consumers and businesses will be able to plan in the longer term, without fear of volatility or instability,” commented Omar Bushahab, Chief Executive Officer, Commercial Compliance & Consumer Protection (CCCP) sector, DED.
Locals seem to be more optimistic on the current state of the economy and personal finance compared to expats. Percentage of the consumers who believe that the economy will recover in next 12 months also slightly decreased to 74 % from 77%.
Rising rental/property prices and tourism boom are the causes of optimism for the next 12 months while “Lack of job opportunities” and “Not much increase in salary level” are the main concerns.
The outlook towards the state of personal finance in the next 12 months during Q2 of 2014 is almost the same as Q1 of 2014. During this quarter, 92% respondents are optimistic about the state of personal finance in the next 12 months, much like in Q2 2013.
The number of consumers who feel that this is a good time to buy things they want, slightly increased during Q2 of 2014. Around two-third of the consumers feel that it is good time to buy thing they need and want.
Job security continues to be the biggest consumer concern in Q2 of 2014, followed by work/life balance. Even when overall concern for job security shows a decline concerns for the work/life balance seem to be increasing.
Majority of the consumers cover essential living expenses but almost half of those who are not able to cover expenses don’t know if they will be able to do that or have spare cash in the future. Lesser telephone and power bills, switching to cheaper grocery brands, delays in upgrading computers, mobile phones etc. and giving up holidays and short breaks are some of the short term actions consumers plan to stay within budget against the rising cost of living.
A ‘Consumer Confidence Index’ provides a single indicator of consumer sentiment towards the current economic situation as well as intentions and expectations for the future and ability to track consumer confidence over a period of time.
The Consumer Confidence Index is based on responses to three questions regarding perceptions of local job prospects, personal finances and whether it is good to buy things that people need and want, all over the next 12 months. Responses vary from Excellent or Good to Not so good or Bad.
Conducted in each quarter, the survey gathers feedbacks from 2,000 respondents, equally divided between the four quarters of the year. The respondents come from all major residential communities across Dubai and cover males and females as well as nationals and expatriates, aged 18 to 59.