Consumer confidence has dropped in Saudi Arabia, reversing an improvement in consumer confidence felt during most of last year, according to the latest Consumer Confidence Index (CCI). The Consumer Confidence Index, a quarterly survey conducted by the Middle East's number one job site Bayt.com in conjunction with research specialists YouGov Siraj, found that Saudi Arabia moved down the index by 2.4 points, the largest drop among the surveyed countries in the Gulf region. As in the previous survey conducted in the last quarter of 2009, half of the countries surveyed around the Middle East and North Africa region witnessed declines in their consumer confidence, with the other half showing positive improvements. In a complete reversal of the last wave when it recorded the highest improvement in consumer confidence, in the current wave, Algeria reported the second highest drop in consumer confidence, moving down the index by 10.7 index points. In this wave, Lebanon recorded the largest drop, moving down the CCI by a sizable 12.1 index points. In the Gulf region, the UAE, Bahrain and Kuwait all saw improvements in consumer confidence, moving up the index by 4.4, 1.9 and 0.9 index points respectively. Respondents in Qatar, however, did not feel that conditions for consumers had improved, moving down the index by 0.3 points. In North Africa, consumer confidence in Morocco improved by a positive 6.2 points, with a drop of 0.7 points in Egypt. “It is always interesting at the first quarter of each year to see how consumer confidence changes from one calendar year to the next. In this wave, what we have seen is that in some cases countries have undergone a complete reversal: they reported drops in the last wave but have improved this time around and vice versa,” noted Amer Zureikat, Bayt.com's regional manager. The Consumer Confidence Index (CCI) is a measure of consumer expectations and satisfaction of various elements of the economy including inflation, job opportunities and the cost of living. As part of the CCI, the respondents are asked questions about their personal financial circumstances and how they compare to the same period last year. Overall, 36 percent of the region's respondents said their financial position was the same and just over a quarter, 26 percent, said it had got better. Among the countries surveyed, personal financial positions improved most in Saudi Arabia and Egypt, where 31 percent of respondents in each country said they were doing better than last year, and at the other end of the spectrum, respondents in Jordan were the worse off, with a total of 41 percent stating that their financial position was worse. Other countries in the Gulf largely varied as to the percentage of respondents who felt their personal financial position had improved: 27 percent of respondents in Qatar said their financial position was better as did 24 percent in Kuwait, and like the UAE, 21 percent in Bahrain said their personal financial position was better than last year. “Gauging consumer opinion is a powerful tool for revealing the current attitudes and sentiments about the business and economic conditions in a specific country and to see how these change overtime. Since the last wave, it seems conditions in some countries have changed completely, with countries that previously showed improvements now showing declines, which perhaps signals the instability still felt across the region as a result of the recession,” said Joanna Longworth, chief marketing officer, YouGov Siraj. In addition to financial position, consumer confidence is assessed by asking the respondents about their level of optimism towards the future, which forms the Consumer Expectations Index (CEI). The countries varied widely in terms of their consumer expectations. Reporting the largest drop was Lebanon, which moved down the index by 14.2 index points, followed by Algeria which moved down by 8.1 points. The UAE, however, reported an improvement, moving up the index by 2.3 index points, and of the Gulf countries, Bahrain reported the biggest improvement, moving up the index by 6.6 points. The rest of the Gulf countries fared worse: KSA, Qatar and Kuwait all moved down the index by 3.5, 3.2 and 0.4 index points, respectively. Notably, Morocco reported an index improvement of 6.5, while Egypt reported a minor improvement of 0.7 index points. On the whole, respondents are expecting to be in a better financial position next year. Overall, 49 percent of the respondents surveyed believe that their personal financial position will be better next year - an improvement of two percentage points since the last wave. By contrast, just 7 percent of the region's respondents believe that their financial position will become worse. In Saudi Arabia, 51 percent of respondents believe that their personal finances will be better a year from now, compared to just 6 percent who believe it will become worse. Most optimistic that their personal financial position will be better a year from now are respondents in Oman and Qatar where 57 percent and 52 percent said things would be better, and in Egypt, where 51 percent also said their personal financial position will be better a year from now. The respondents also remain largely optimistic that their country's economy will be better in a year's time. Overall, 41 percent said that their country's economy will be better, 21 percent said it will remain the same, and 20 percent said it will become worse. Currently, respondents in Oman, Bahrain and the UAE are the most positive about the expected improvements in their country's economy, with 60 percent, 56 percent and 48 percent, respectively, stating things will be better. In Saudi Arabia, 43 percent of respondents said things will be better in their country's economy in a year's time. Respondents in Jordan were most pessimistic about their country's economy a year from now: 37 percent said that it will become worse. As part of the survey, respondents were also asked what they feel their propensity to consume is, as part of the Propensity to Consume Index (PCI). In a complete reversal from the last the last wave when it moved down the index by 10.0 points, in this wave the UAE moved up the index by 11.3 index points - the highest increase among the surveyed countries. Syria and Qatar both reported positive improvements, moving up the index by 9.5 and 5.5 index points respectively. At the other end of the spectrum, Lebanon recorded the largest drop, moving down the index by 15.8 index points, followed by Algeria, which moved down the index by 11.2 points. Unlike the previous wave when it moved up the index by 26.7 index points, in the current wave Bahrain moved down the index by 9.4 index points. Drops were also recorded in Kuwait and Saudi Arabia which moved down the index by 3.5 and 2.4 points respectively. Asked whether it was a good time or not to buy consumer durables, the respondents largely agreed that it was either a bad or neutral time to buy: 37 percent agreed it was a bad time to buy items such as televisions or refrigerators, while 35 percent of the respondents said it was a neutral time. Another contributor to the CCI is the Employee Confidence Index (ECI), which measures the attitudes of respondents to the local job market, in terms of their satisfaction towards the availability of jobs and their satisfaction with their salary. Saudi Arabia showed a drop of 2.8 points. Almost all of the countries showed drops in this index, with the exception of Morocco and Bahrain which moved up by 4.4 and 2.1 index points respectively. Showing the biggest drop was Algeria, which moved down the index by 8.4 index points, followed by Lebanon which moved down by 5.9 index points. In the rest of the Gulf, Qatar and Kuwait also moved down the index by 3.4 and 2.2 points respectively. When asked whether they believe more jobs will be available in a year's time, respondents are roughly divided: 30 percent said more will be available, 28 percent said the job situation will remain the same and 28 percent said the availability of jobs would be worse. In Saudi Arabia, 35 percent believe the availability of jobs will get better while a quarter of respondents believe the availability of jobs will become worse. On salaries and whether they have kept pace with the cost of living, as in the previous wave, the majority feel that they have not kept pace with the cost of living, with 64 percent agreeing that there is a disparity, while just 19 percent agreed that they have increased in line with the cost of living, and 5 percent said they have increased more than the cost of living.
