82% of Dubai consumers confident about economy, 86% about personal finances
Consumers in Dubai appeared to be more optimistic on the overall state of the economy and job prospects compared to six other leading cities in the world in an analysis of consumer confidence conducted by the Department of Economic Development (DED) in Dubai.
The comparative study showed that the overall Consumer Confidence Index (CCI) for Dubai stood at 142 points during the second quarter of 2016, higher than that of Tokyo, Milan, Paris, New York, Bangkok and London. It was also a significant leap from the CCI score of 138 recorded in Dubai during the last quarter of 2015.
Dubai also stood out in terms of consumer perception on the overall economy and confidence in personal finance. In fact, consumer perception on the state of the economy was the brightest in Dubai as 82% termed it as ‘Excellent/Good,’ whereas New York was in the second spot with 64% voicing a similar sentiment.
For 86% consumers in Dubai and 74% in New York, the personal finance scenario was ‘Excellent/Good’ in Q2 2016. Paris (53%), London (50%), Milan (42%), and Bangkok (36%) were ranked next while Tokyo was at the bottom of the table with a ‘Not So Good/Bad’ situation revealed by 67%.
The difference in confidence levels is further reflected in purchase decisions. In Dubai, 79% consumers saw it a good time to buy things they need and want, while in Tokyo, 65% didn’t feel confident to go shopping.
Generally, tourism boom was seen to be main driver of positive consumer perceptions in all the seven cities but in Dubai particularly, confidence in the state of economy during Q2 2016 was largely founded on the increase in rental/property prices.
“The Consumer Confidence Index serves as a reliable, single indicator of consumer sentiment on the economic situation. Comparing consumer perceptions on the local economy with similar indicators across other major cities enables us to evaluate how Dubai scores as a global business destination in terms of competitiveness and sustainability,” stated Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection (CCCP) sector in DED.
DED monitors consumer confidence in Dubai every quarter, based on the responses to three questions regarding local job prospects, personal finances, and whether it’s a good time to buy things that people need and want, all over the next 12 months. The scale of answers to all three questions is: Excellent, good, Not So good, Bad.
“The comparative analysis shows that the prevailing concerns in major cities are almost same, but there is optimism as well as sectors performing to expectations in certain economies. Particularly, personal spending plans for the year ahead in Dubai indicates an improved sense of job security and financial freedom, as well as robust retail activity ahead” added Lootah.
Job security and the economy are the major consumer concerns in all the seven cities studied. Dubai and New York led in terms of job security, with the percentage of consumers foreseeing job prospects as ‘Excellent/Good’ standing at 78 and 71 in the two cities, respectively.
“Overall, the comparison validates the steps taken by the leadership and the various public and private sector entities in Dubai to shore up confidence in Dubai as an ideal destination to live and do business, even amidst global instabilities,” said Lootah.
Inadequate increase in salary levels and lack of job opportunities were cited as the main drivers of negative perceptions on the current state of economy in all the seven cities.