Consumer confidence in Dubai at six-year high, Dubai Economy says

Improving personal finance conditions drove the boost in the confidence index

Dubai Economy’s consumer confidence index indicated that 84 per cent of consumers were largely optimistic about personal finance conditions over the next 12 months. Photo: Chris Whiteoak / The NationalShow less

Dubai’s consumer confidence index reached its highest level since 2015 during the first quarter, according to Dubai Economy.

The index is conducted quarterly to gauge consumers’ spending habits and their perceptions about the economy, personal finances and job opportunities.

The data collected is used to develop policies to guide the private sector to estimate demand. The government body did not provide details on the number of people polled.

The index reading for the first quarter of 2021 stood at 145 points, an increase from 139 points in the same period a year earlier. The index registered 142 points in the fourth quarter of 2020. A comparative figure for 2015 was not provided.

Mohammed Lootah, chief executive of the commercial compliance and consumer protection sector in Dubai Economy, attributed the growth in consumer confidence to respondents’ improving personal finance conditions.

“Consumers expressing optimism on their personal finance conditions during the first three months of this year have increased to 77 per cent, compared to 70 per cent during the last quarter of 2020,” he said.

Dubai, the commercial and trading hub of the Middle East, has seen its economy recover over the past few months following the global impact of Covid-19. The emirate’s non-oil private sector economy registered growth in February as its rapid vaccine campaign fuelled optimism and boosted employment and output, according to IHS Markit Purchasing Managers’ Index.

Dubai’s economy is forecast to expand 4 per cent in 2021, driven by its effective response to Covid-19, according to government projections released in December.

Dubai Economy’s consumer confidence index also indicated that 84 per cent of consumers were largely optimistic about personal finance conditions over the next 12 months compared to 73 per cent during the same period last year.

Eighty four per cent of consumers,89 per cent of UAE nationals and 87 per cent of Western expats were optimistic about the overall economy during the next 12 months.

Seventy nine per cent of consumers, 94 per cent of public sector employees and 89 per cent of Western expats feel the time is right to buy the things they need or want to buy, the survey showed.

Nearly 38 per cent of consumers said they will spend funds left over after their basic needs on vacations, while 37 per cent will spend them on outdoor entertainment and 34 per cent plan to save.

Also, 48 per cent of consumers plan to cut down on buying new clothes, 43 per cent will delay technology upgrades and 41 per cent will order fewer meals to stay within budget.

Meanwhile, 87 per cent of consumers believe job opportunities will increase during the next 12 months, with 90 per cent of those in the 30-39 age group being most optimistic, Dubai Economy said.