Despite fears of a double-dip recession and global uncertainty, consumer confidence in the UAE is at a record high according to an authoritative global survey that has been monitoring economic health in the Middle East for about two decades.
In a survey of 17,620 respondents in 25 markets, the MasterCard Worldwide Index of Consumer Confidence posted the country's strongest showing ever in the retail, travel and hospitality sectors.
"Consumer confidence in the UAE is at a record high, with a score of 95.6 showing significant improvement from six months ago (73.6), a year ago (82.4) and even 18 months ago (86.1)," stated MasterCard yesterday.
"In fact, the latest consumer confidence score for the UAE is the highest that it has been since 2004 and is significantly higher than markets such as China (78.3), Hong Kong (69.9) and India (75.2)."
The scale of the study is weighed with 100 being the most positive and zero being the most pessimistic when it comes to economic expectations for the next six months.
The UAE scored high in each of the five survey categories with consumers responding to the economy (96.2), regular income (96.1), employment (94.7), quality of life (95.7) and the stock market (95.4).
The latest round of polling by MasterCard was conducted between March and April.
Dr. G?yas Gökkent, group chief economist with National Bank of Abu Dhabi, told Gulf News yesterday that the survey is consistent, albeit the ratings may be slightly lagging because polling was done earlier this year before new global crisis issues hit the international business community.
"The report is unlikely to reflect the impact of the latest round of global uncertainty [i.e. since the start of August]," Gökkent said.
"Having said that, past macroeconomic data point to higher readings across a number of indicators compared to a year ago and so results are consistent. Average oil price [Dubai spot] at over $105 per barrel year-to-date (up 39 per cent year on year) means UAE national income will rise sharply in 2011. Moreover, the UAE has increased oil production. In fact, the UAE has generally been a beneficiary of regional turmoil, attracting more companies and tourists to the country. In the immediate period, declining asset prices may create a negative wealth effect, thus weighing on sentiment."
The survey findings, meanwhile, indicaate that the UAE's economy is better than it was a year ago.
"It confirms that sentiment had improved in the period that the survey examined compared to a year ago and so must be regarded as positive. There is extreme volatility in global financial markets at this time and for now there is reduced visibility on global prospects," Gökkent said. "Under the assumption that global growth continues at a reasonable pace, then the UAE economy should continue to do well."
One of the more revealing figures culled from the survey was a higher level of confidence about the economy by males than females (97.2 vs 93.6).
Residents younger than 30 were more optimistic (98.2) than those over 30 (93.5).
Raghu Malhotra, general manager, Middle East, MasterCard Worldwide, said survey figures suggest that consumer confidence may climb even higher later this year.
"It is very encouraging to see that UAE consumer sentiment is continuing its upward momentum and is expected to reach a record high in the coming months," Malhotra said in a statement.
"The findings are in line with the recent trends that we have observed in the market with retail, travel and hospitality sectors, in particular, registering a significant upturn. The MasterCard survey provides further good news for the UAE business community."
Dubai Consumer confidence isn't climbing only in the UAE. Attitudes by respondents to the MasterCard survey across the Middle East are even more optimistic about the health of business sectors within their markets.
"Overall, in the Middle East, consumer confidence has gone up significantly compared to six months ago (83.4 vs 71.6)," the survey said. "Respondents were most optimistic about regular income (86.8 vs 83.0 six months ago) and least optimistic about the stock market, even though the latter indicator has increased drastically in the last six months (81.5 vs 63.2)."
The survey shows that all five economic indicators shot up throughout the Middle East compared to six months ago and now are outpacing Asia/ Pacific (61.5) and Africa (73.8).
By comparison, the survey reported yesterday that consumer confidence is "is highest in Oman with a remarkable score of 99.
Saudi Arabia ranked second regionally with a score of 98.6. Qatar earned third position with a score of 95.7.