According to a consumer confidence analysis by the Department of Economic Development (DED) in Dubai during the second quarter of 2016, consumers in Dubai appeared to be more optimistic about the overall state of the economy and job prospects compared to six other leading cities in the world.
The study, which compared the Consumer Confidence Index (CCI) of six major cities in the world - Tokyo, Milan, Paris, New York, Bangkok and London - revealed that the overall CCI for Dubai stood at 142 points during the research period. It also showed a substantial rise from the CCI score of 138 recorded in Dubai during the last quarter of 2015.
“Dubai scored 142 points in the index for the second quarter of 2016, which was higher than the six other international cities examined,” Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance and Consumer Protection (CCCP) sector in the DED, told Gulf News Journal. “It shows a positive consumer sentiment prevails in Dubai and that confidence in personal income and the state of the economy in Dubai is higher compared to major cities like New York, Paris, Milan, Bangkok, London and Tokyo.”
DED monitors consumer confidence in Dubai every quarter based on the responses to questions regarding local job prospects, personal finances and whether it’s a good time to buy things that people need and want during the next 12 months. Possible responses to the questions were excellent, good, not so good and bad.
“For Dubai, the Consumer Confidence Index is an important indicator, which reveals consumer perceptions on personal income, employment prospects in the city and state of the economy,” Lootah said. “Broadly speaking, the quarterly index and its related research analyze consumer behavior in terms of expenditure and saving.”
As per the study, consumer perception on the state of the economy was the highest in Dubai, as 82 percent termed it as excellent or good, ahead of New York with 64 percent voicing a similar sentiment. Also, 86 percent of consumers in Dubai rated their personal finance scenario as excellent or good, compared to 74 percent in New York, 53 percent in Paris, 50 percent in London, 42 percent in Milan and 36 percent in Bangkok.
The difference in confidence levels is further reflected in purchase decisions. In Dubai, 79 percent of consumers saw it as a good time to buy things they need and want, while in Tokyo, 65 percent didn’t feel confident to go shopping.
Tourism was seen to be the primary driver of positive consumer perceptions in all the seven cities, but in Dubai particularly, confidence in the state of the economy during the second quarter was largely founded on the increase in rental/property prices.
“Property as a sector was not a criterion or focal point in the consumer confidence index anywhere among the seven cities evaluated,” Lootah said. “In Dubai, property/rental prices were mentioned as a major driver of positive perception on the state of the economy.”
Job security and the economy were the foremost consumer concerns in all the seven cities studied, but Dubai and New York were rated tops in terms of job security, with 78 and 71 percent of consumers, respectively, seeing job prospects as excellent or good.
“The overall strength of the economy as evident in robust performance across varied sectors, and transparency across governance are the major drivers of the positive consumer sentiment in Dubai.” Lootah said. “The Department of Economic Development will also continue its efforts to improve transparency and service quality across the retail sector in Dubai, as they are integral to maintain exceptional levels of consumer confidence.”