Consumer confidence declines in Middle East

30 April 2010

DUBAI: Consumer confidence levels are declining in the Middle East, meaning many shoppers are taking a conservative approach when it comes to spending.

Ipsos, the research firm, recently conducted a survey in seven markets across the region – Egypt, Jordan, Kuwait, Lebanon, Morocco, Saudi Arabia and the United Arab Emirates.

Popular perceptions of the current economic situation peaked with an index score of 6.9 points in Saudi Arabia, 6.5 points in the UAE and 5.2 points in Kuwait.

This barometer stood at 5.1 points in Morocco and Jordan, but fell to 4.5 points in Egypt and 3.5 points in Lebanon, with all of the featured nations having posted a contraction on this metric since June 2009.

More specifically, 58% of participants in Saudi Arabia stated they had not been affected by the downturn, with Egypt, in second place, some way further back on 29%.

In contrast, at least 80% of contributors in Kuwait, Jordan and Lebanon had directly felt the impact of the downturn, rising to 90% in Morocco and the United Arab Emirates.

Nearly 80% of panellists in the UAE expected the economic situation to improve during the year that started in March 2010, with around 70% of people in Saudi Arabia, Kuwait and Jordan saying the same.

A majority of Moroccans were positive about the domestic fiscal outlook, but only four in ten of their counterparts in Egypt and Lebanon held this view.

Respondents in the United Arab Emirates and Kuwait gave their personal financial circumstances the highest ratings, on 6.3 points, which contrasted with a low of 4.5 points in Lebanon.

Elsewhere, a plurality of the sample in every country except Morocco were found to be "less comfortable" about making a major purchase such as a house or car compared with six months ago.

Over a third of those taking part in the poll in Saudi Arabia, Kuwait and Jordan were "more comfortable" about making this kind of acquisition, as were around a quarter of adults in Egypt, Lebanon and the UAE.

However, consumers were generally more "cautious" about their potential spending levels for the short term at least.

According to Ipsos, the "differing economic standards" of each country, and the substantial variations in wealth across the Middle East, were among the defining characteristics of the area.

Data sourced from Zawya; additional content by Warc staff