Dubai consumers confident of economy improving this year

Mohammad Lootah

DUBAI — Consumers in Dubai see improved job prospects and personal finances ahead, according to the quarterly business survey of Dubai Economy. The survey conducted during the last quarter of 2019 (Q4 2019) shows 75% of consumers as confident of the employment situation improving during the next 12 months. Even when the Consumer Confidence Index showed a slight four-point decrease to 133 points from the previous quarter, 77% of respondents were positive about their current personal finances and the percentage of those optimistic rose to 79% when asked about the next 12 months.

Although job security is a major concern, 63% of consumers rated current job prospects as excellent/good, while nearly half said they plan to cut down on outdoor entertainment and delay technology updates such as personal computers, mobile phones, etc. Job security remained the next biggest concern after the economy. Consumer perceptions are based on three aspects: job prospects, personal finances, and chances of buying things they need/want to buy.

Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection (CCCP) sector in Dubai Economy, said: “Dubai’s economy recorded positive results during Q4 2019 as a result of the initiatives launched by the government as directed by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. The public and private sectors responded overwhelmingly to these initiatives consolidating optimism among various communities and attracting more domestic and foreign investments in varied sectors. The year 2020 started with a high level of momentum and coincided with the announcement of the January 4 Charter, the completion of many infrastructure projects, and the government’s aggressive follow-up of institutional performance to ensure preparedness for the Expo 2020 and the next 50 years at the national level”.

Lootah added: “Dubai’s economy will indeed see the benefits of these initiatives this year. Already, economic observers and analysts are expecting a renewed wave of growth locally and nationally. In addition, the efforts and co-ordination of all government entities to develop plans and proactive solutions to various forms of challenges help cement Dubai's position among the best global investment destinations. At Dubai Economy, we will continue to evaluate the general economic climate and coordinate with our partner government entities to promote innovation and inspire confidence, trust, and happiness among all stakeholders. Our goal is to translate the visions and directives of the wise leadership into action and launch industrial as well as commercial projects to further diversify the economy.”

The Q4 2019 survey showed 77% of UAE nationals as optimistic about finding a job currently, with 22% describing it as excellent, and 55% as good. Among expats, 57% expressed optimism about current job prospects, while 84% nationals and 71% among expats were positive on the chances of finding a job during the next twelve months.

Regarding current personal finances, 76% of consumers expressed optimism. Among UAE nationals, 81% of those surveyed showed optimism and that group comprised 22% who rated their personal finances as excellent and 59% who said they are good. As for expats, 12% expressed optimism, with 63% saying it looked good. Optimism seems likely to persist over the next 12 months for 79% and reach 83% among nationals and 76% among expats.

When asked about buying the things they need and want to buy, 60% expressed their satisfaction with the cost of things, whereas 79% of nationals said they were excellent or good. The percentage decreased to 76% among expats.

Perceptions on the economic situation in Dubai were highly positive among nationals at 77%. More than half of the expatriates (56%) also expressed optimism about the current economic situation while the overall percentage reached 63%. The positive perception was largely due to the trade momentum and recovery of tourism, while the lack of employment opportunities and the lack of salary increases were among the main reasons for the negative perception.

Generally, there is optimism on the economy in Dubai as 74% of UAE nationals and expatriates rated it to be excellent or good. The percentage of those who believe Dubai’s economy is in recession remained the same (25%) as the previous quarter, while the percentage of consumers who expect the economy to recover during the next 12 months decreased from 55% to 41%.

Job security was the biggest concern during this quarter, with the percentage reaching 42% among expats and 15% among nationals . The economy ranked second on the list of major concerns for 16% of expats and 9% of nationals.

Most consumers (86%) confirmed that they are able to meet basic life expenses and almost a third said they spend whatever money left on vacations or save them. Nearly half of consumers said they plan to reduce outdoor entertainment or delay technology upgrades such as personal computers or mobile phones, etc. as part of balancing the family budget.

The Consumer Confidence Index captures a consumer's individual perceptions on the economy as well as intentions and expectations for the future while also tracking consumer confidence over a specific period of time. — SG