Dubai: We're a nation that sees the cup half full. The UAE ranks the tenth most optimistic nation among 53 countries, although three-quarters of consumers still believe that they are in a recession, according to the latest AC Nielsen Global Consumer Confidence Survey.
The third-quarter survey, which polled 26,000 people worldwide, is based on consumer confidence in the job market, personal finances and readiness to spend over the next 12 months. It defines confidence as the degree of optimism about the economy expressed through consumer saving and spending.
"The economic outlook for the UAE has improved but I don't think for a second that the UAE is the 10th best economic story," Simon Williams, HSBC's chief economist for the Mena region, told Gulf News. "I'm surprised by the findings and find it difficult to believe."
The UAE's growth rate this year of two per cent is well below the average emerging market growth rate of six per cent, he said. "It's difficult to square that optimism with economic expectations."
Optimism in the UAE has remained steady at 101 points over the third and second quarters of 2010 and dropped one point since the third quarter in 2009, the survey showed.
Just over 60 per cent of consumers said their personal finances were in "good" or "excellent" shape this quarter compared to 64 per cent last quarter.
However, 76 per cent of consumers believe the recession is ongoing, a figure that has not improved much since last quarter or the same period last year.
Confidence in local job prospects has declined steadily since the beginning of the year with only 54 per cent of consumers believing they have "good" or "excellent" job opportunities.
People in the UAE are most concerned about job security, work-life balance, the economy and debt in the next six months, the survey revealed.
Households are still trying to manage their balance sheets. The survey showed that consumers are careful with disposable income as 50 per cent are saving spare cash and 35 per cent are using it to pay off debts.
"Consumers are taking a step forward and are now ready to put their money in investments and look at different retirement schemes," said Sevil Ermin, Managing Director of AC Nielsen in the UAE.
They are fighting rising costs by staying within budgets: 58 per cent are spending less on clothes, 52 per cent are cutting down on entertainment outside, and 52 per cent are cutting telephone expenses, the survey said.
"There is a broad realisation that the road to full economic recovery is going to take longer than expected and that consumers need to remain cautious about their spending habits and job security," said Himanshu Vashishtha, AC Nielsen's Regional Managing Director in the Middle East and Pakistan.
Besides the UAE, Saudi Arabia was the only other Arab country to make it to the top ten at third place.
Globally, consumer confidence fell by three points in September to 90 points. Consumer confidence index levels above and below a baseline of 100 indicates the degree of optimism and pessimism.
Consumer confidence declined in 20 out of 53 markets in the third quarter, mainly in North American and European countries.
India (at 129 points) and Thailand (117 points) were the most optimistic nations. Portugal (44) and Japan (52) were the most pessimistic.