Consumers confident about recovery

Thursday, 11 March 2010

Consumers of major Middle Eastern and western states expect the global economy to revert to pre-crisis levels within the next three years and generally believe that conditions are not as bad as reported by media, according to a consumer confidence study conducted by Real Opinions in conjunction with marketing communications consultancy Orient Planet. The study covered the UAE, Saudi Arabia, the UK, the US, Russia and Germany.

More consumer confidence studies are being undertaken over other forms of market forecasts, which are being perceived as less effective in light of the extended downturn. The UAE and Saudi Arabia were included in the study due to their strong influence on the Middle Eastern economy. The 1555 respondents from the sample countries showed that, on average, 46 per cent of consumers believe that the crisis has not been as damaging as portrayed by media.

"It is very hard to base corporate plans on statistics given today's highly unpredictable markets. That's why we see more organisations focusing on monitoring consumer attitudes, so that they can take a more reactive business approach. The global economy has become so interconnected that international consumer confidence has become a good gauge of economic trends," said Dan Healy, CEO of Real Opinions.

Eastern and western households reported almost similar drops in their monthly expenditures, at aggregates of 61.5 and 67 per cent respectively. Of the more than 300 UAE families surveyed, 70 per cent said that they had streamlined spending in keeping with the times. However, a significant 19 per cent said that they did not change their budgets, with six per cent even reporting increased spending.

On average, respondents expected economic recovery to begin within the next 18 months. Middle Eastern consumers predicted an earlier start at 16 months, as opposed to an average of 19 months for their western counterparts. The UAE posted an optimistic 14-month projection for the commencement of a rebound, although it foresees full recovery to be realised by around late 2012.