Consumer confidence in UAE economy picks up in second quarter

A manufacturing facility in Dubai. A number of gauges indicate that business confidence has improved in the UAE. Sarah Dea / The National

Consumer confidence in the UAE improved in the second quarter, reversing a decline in the previous three months, a new survey showed.

The second-quarter confidence score for the UAE rose by five points to 109, after declining four points in the previous quarter, the global information company Nielsen said.

The outlook for job prospects advanced by nine percentage points, while the personal fin­ance sentiment gained six percentage points, it said.

“Market dynamics have not changed significantly, and consumers were cautiously optimistic about spending intentions,” said Arslan Ashraf, the managing director of Niel­sen UAE. “They continue to be prudent with their expenses, especially when it comes to spending on new clothes, out-of-home entertainment and out-of-home dining.”

Overall, in the Middle East and Africa, confidence remained steady at 89, a one point increase over the first quarter.

Economic sentiment in the UAE ticked up slightly last month, as businesses reported an increase in new orders and output, according to the latest survey of purchasing managers by Dubai lender Emirates NBD.

The UAE Purchasing Managers’ Index (PMI), a measure of business activity in the non-oil private sector, rose to a 10-month high last month, as the economic slowdown in the first half of the year prompted by the slump in oil prices appeared to have bottomed out.

The index, which covers manufacturing and services, rose to 55.3 last month from 53.4 in June. A figure above 50 means business is expanding, while below 50 signals a contraction.

The index, which is considered one of the earliest indicators of an economy’s performance, was still significantly lower than it had been last year, when it stood at 55.8.

A pick up in demand helped improve Dubai’s Department of Economic Development’s Business Confidence Index by 7.4 points to 117.5 during the second quarter compared with a year ago.