Consumers in the UAE optimistic about job prospects and personal finances; one of the few communities with largest number of people who have no major concerns at all

Dubai, January 21, 2006: Consumers in the UAE are bullish about the future of the local economy and their prospects, reveals ACNielsen's Global Online Consumer Confidence Survey conducted in 41 countries in November 2005. The Consumer Confidence Survey, polling over 23,500 regular Internet users worldwide was extended to include the UAE for the first time this year.

The UAE is among the Top 10 countries with the highest Consumer Confidence Index globally, ahead of other countries like Singapore, US and UK. The index, introduced by ACNielsen earlier this year, is calculated based on consumers' opinion of the development of local economies, employment opportunities and other concerns. UAE ranked ninth, with 110 points, 12 points above the global average; India tops the Index with 132 points.

The world's most optimistic consumers live in Asia-Pacific and Canada, as well as in two Scandinavian countries - Denmark and Norway. It is interesting to note that the trust of the global population in a better future is on the rise. The ACNielsen Consumer Confidence Index grew from the average 92 points in May 2005 up to 98 points in November, with two thirds of countries seeing it rise.

Job Prospects and Personal Finances
Over three quarters (77%) of Internet users in UAE are optimistic about job prospects over the next year. Their optimism is significantly higher than that of an average global consumer (by 53%). The UAE is second only to India by the number of people who feel that their job prospects are excellent! Over two thirds (69%) UAE respondents expected their financial state to be excellent or good. This number is comparable with Canada and is higher than in most of Western European countries.

"The UAE's booming economy creates abundant job opportunities. This gives people confidence in their ability to earn a sound living and provide for their families", commented Piyush Mathur, Managing Director, ACNielsen's in the GCC region. "However, at the same time, life is quickly becoming more expensive, the salaries growth pace fails to catch up with the inflation."

"We see more and more professionals coming to work in the UAE. The in-flow of high caliber experts accelerates the industry, services development and the competition in the job market. Also, a segment of consumers in the UAE are concerned about their job security as there is relatively less freedom to change jobs in the UAE," adds Piyush Mathur.

It's time to save
In spite of the high confidence in the future of personal finances, people living in the UAE prefer to save the earned money and not rush to spend. 39% believe now is a good time to buy the things they want and need. This perfectly coincides with the global trend, although expectations of one's financial well-being have improved in many countries of the world, including Europe, people are still cautious about spending money.

In addition, more people globally prefer to put their spare money into savings or use it to pay off debts and loans, UAE is not an exception. 37% of respondents say they save the money left after paying essential living expenses. 43% consumer use their savings to pay off debts and loans. In fact, UAE is very near the global top 10 by debt payoff rate. "With the recent increase in prices in the UAE, consumers are under pressure to first pay their credit card bills and their debts," explained Piyush Mathur. 

Save... to spend on holidays?
Travel agencies rejoice! Spending on holidays ranks third in UAE consumer's budget after savings and debt return. As many as 32% of Internet users say they spend the money left after covering primary living expenses on vacations.  

"Holidays are important for both Nationals and Expatriates in UAE. The motivation among Nationals is more towards relaxation while Expatriates are looking more for adventure and discovery." Adds Piyush Mathur "Since we have a large expat population in UAE there is substantial travel for holidays as well as travel to the home country for a vacation. This is triggered by availability of air tickets as part of expatriate packages in the country. It certainly becomes evident during the summer season when a significant proportion of the population is out of the country". 

Home entertainment
Home entertainment ranked first in the popular 'spend article' list, globally. In the UAE, it is the next popular option after holidays and vacations with 26% of respondents spending their spare money here.

"'Shoppertainment' is a concept unique to the region whereby shopping and entertainment go hand-in-hand.
 
This is facilitated by the availability of world class retail environment and the extended summer season" says Piyush Mathur. Globally, Latin Americans are the biggest spenders, with 51% regional average.

Investment in Shares of Stocks / Mutual Funds
Almost a quarter of UAE consumers 24% invest spare cash in share stocks/ mutual funds. Stock shares and fund investments is another area where UAE is among Top 10 most spending countries, surrounded by Asian states. Apparently, Asian and UAE consumers try to not only save but multiply their resources, which cannot be said about Europeans. In Europe, putting money into savings ranks fifth after out of home entertainment, buying new clothes, holidays and home decoration.

 "The recent trend of getting high ROI by investing in shares/IPO's is gaining momentum and is much higher at 24% than the global average of 14%. That really explains the heavy oversubscriptions of the IPO's in the UAE", adds Piyush Mathur. Notably, 12% of respondents in the UAE said they have no spare money to spend. This is slightly higher than the global average of 10%. 

Major fears and concerns
One in ten UAE consumers feel that there are no major fears and concerns compared to one in sixteen in other parts of the world. "In the UAE, crime levels are much lower than most other developed markets and people are happy living here", comments Piyush Mathur

The top two concerns are about the economy and job security, followed by health concerns. "It's no surprise, since in any economy growing at a rapid pace consumers do get skeptical about the longevity of such growth. Further, the relatively less freedom for changing jobs does make consumers concerned about their job security."

Health concerns are at a much lower level (10%) compared to a global average of 18%. Health concerns are much higher among Europeans and Americans with their ageing population as compared to a relatively younger population in the UAE.

"The UAE has grown tremendously over the past few years and together with the consumer confidence portrayed in our survey, we believe we can be optimistic about our future." concludes Piyush Mathur

-Ends-

About ACNielsen Online Consumer Confidence Survey
The ACNielsen Online Consumer Confidence Survey, the largest twice-yearly global survey of its kind, is aimed to gauge consumers' current confidence levels, spending habits/intentions and current major concerns. The most recent wave of the survey took place last month (November 2005) and polled over 23,500 consumers regular Internet users in 41 markets in Europe, North and Latin America, Asia-Pacific region, Africa (Republic of South Africa) and the Middle East (UAE). In the UAE, the survey polled 300 Internet users aged 15 and older.

ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

For further information please contact:
Patricia Tellis         
ASDA'A Public Relations  
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E: p.tellis@asdaa.com  
Website: www.acnielsen.com

Himanshu Vashishta
ACNielsen AMER
T: +971 6 5724848, Ext: 216
F: +971 6 5728155
E: Himanshu.Vashishtha@ACNielsen.ae

© Press Release 2006