Dubai: Job security remains one of the major concerns of UAE residents. According to the latest Global Consumer Confidence survey conducted by Nielsen, perceptions of job prospects declined this quarter to 50 per cent of survey respondents who thought job prospects were good or excellent compared to 54 per cent in the third quarter of 2010.
"Having weathered the worst of the storm with the Dubai debt [restructuring] in the last quarter of 2009, which was followed by a quick resurgence in optimism, UAE consumers are now holding their breath for a significant positive indicator," said Sevil Ermin, managing director of Nielsen in the UAE.
However, according to Christo Daniels, managing director of IQ Selection, a recruitment agency, their company has seen a rise in vacancies and hiring.
Budgets finalised
"Our experience is that vacancy numbers have risen considerably since the fourth quarter of 2010 as recruitment budgets have been finalised for the year, Daniels said.
"HR managers have opened vacancies that were previously on hold. The amount of hiring that's happening and the number of vacancies being released is a lot higher."
According to the survey, confidence levels on the UAE's recovering economy also remain quite low. The report stated that 69 per cent of consumers still think that they are in a downturn, with only one third of them believing the country will come out of the downturn in the coming year.
A knock-on effect of this has been a lack of consumer confidence. The fourth quarter of 2010 saw consumer confidence falling in half the countries surveyed.
In the UAE, consumer confidence dropped by four points from the third quarter of 2010 to 97 points in the fourth quarter of 2010. The country is now ranked 15th on the Global Consumer Confidence Index.
This fall in confidence has led to a change in spending habits where savings remains a top priority.
"Since the [downturn] I've seen a huge shift in the awareness about the importance of savings. They have now started to pay more attention to their savings. Our database grew by 9 per cent last year. By the end of 2010 we had over 612,000 customers," Mohammad Qasim Al Ali, CEO of National Bonds, told Gulf News.
The survey revealed that about 68 per cent of the UAE's consumers have changed their spending habits to save on household expenses. According to the survey, UAE consumers are reducing the amount they spend on clothing, entertainment, phones, take-away meals and home entertainment.
Pragmatic behaviour
"Consumer spending is still nowhere near its pre-recession levels in the UAE, with many opting to allocate any remaining income, after covering essential living expenses, to savings [46 per cent] and paying off debt [30 per cent]. UAE consumers continued their pragmatic behaviour with coping strategies that combine both essential and discretionary spending," Ermin said.
Retailers are finding that instead of buying less, consumers are more concerned about value for money.
"During the first few weeks of the Dubai Shopping Festival we're seeing spending. In the first 10 to 11 days we were close to 35 per cent growth over last year.
"So we haven't seen a lack of customer confidence, but we have seen an increase in consumers looking for value for money," Neelesh Bhatnagar, director of the Oasis Centre and head of the Landmark Group, told Gulf News.
Other rising concerns include children's education and welfare, increasing utility bills, food and fuel prices.
The report tracked consumer confidence among 29,000 online consumers in 54 countries throughout Asia Pacific, Europe, Latin America, the Middle East and North America.
How have your spending habits changed? Do you see yourself saving more money than you used to? Tell us about it below.
