Dubai: Consumer confidence in the UAE dropped four points in the first quarter of this year compared to the previous quarter, as the drop in oil prices negatively affected consumer sentiment, according to a survey by global research firm Nielsen.
While consumer confidence edged down last quarter, it was above-the-baseline score of 104. Saudi Arabia’s score matched that of the UAE.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between March 1 and 23 this year. More than 30,000 online consumers in 63 countries around the world were polled.
The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions.
“The decline in oil prices is likely taking a toll on consumer sentiment in the UAE, which has dropped to the lowest level in six years,” Arslan Ashraf, managing director at Nielsen Arabian Peninsula and Pakistan, said in a statement.
He pointed out that one in every two respondents believed the economy was in recession, and their biggest concern was job security.
According to the survey, many in the country said they are cutting back spending on entertainment, new gadgets and clothes. Instead, some are using their money to settle their financial liabilities.
“In spite of depressed consumer sentiments which are prevailing since last year, it is important to note that UAE consumers are still upbeat about economic outlook in the long term. UAE consumer confidence score at the current level is among the top ten countries globally. Moreover, sales of retail fast-moving consumer goods, as measured by Nielsen, are also showing growth,” Ashraf added.
He told Gulf News by email that if market conditions remain as they are in the next quarter, “we may witness the same level of consumer confidence.”
Saudi Arabia conference
In Saudi Arabia, meanwhile, consumer confidence declined two points in the first quarter of this year compared to the fourth quarter of 2015, to a score of 104.
Heavy rationalisation in government spending, job security concerns and the geopolitical situation in the kingdom have negatively impacted consumer sentiment, the survey showed.
“Six in every ten respondents in Saudi Arabia believed the economy was in recession in the first quarter — recessionary sentiment rose in low double-digits,” Ashraf said. “Consumers are more cautious with their spending and prioritising their needs. They are more inclined to cut back on entertainment, upgrading of electronic gadgets and saving the money for rainy days.”
Meanwhile, consumer confidence globally remained stable in the first quarter, edging up one index point to 98.
The score showed mixed confidence levels in every region.
In the survey, consumer confidence increased in 33 per cent of measured markets (20 of 61 markets), compared to 43 per cent of measured markets.