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Consumer confidence down, says survey

CAIRO: MasterCard regional executives convened on Monday to announce the latest results of their Consumer Market Outlook survey, conducted semi-annually across 21 countries in Asia, the Middle East, and Africa. The results of the study are distributed to MasterCard’s partners and are intended to gauge consumer confidence. “We are in a unique position to gauge …


CAIRO: MasterCard regional executives convened on Monday to announce the latest results of their Consumer Market Outlook survey, conducted semi-annually across 21 countries in Asia, the Middle East, and Africa.

The results of the study are distributed to MasterCard’s partners and are intended to gauge consumer confidence.

“We are in a unique position to gauge consumer confidence, said Shaun Rashid, Area Business head for Africa and the Levant, who presented the survey results.

Broadly speaking, the results reflected a decline in consumer confidence from the previous survey based on a deterioration of global economic conditions.

Comparisons between the January results and the current ones also illustrated consumer confidence to be a lagging indicator of economic conditions.

Though a handful of the 21 countries surveyed registered higher levels of consumer confidence between six months ago and now, all six Middle East countries reported declines.

Each country in the survey is given a number from 0 to 100, with 100 indicating the highest level of consumer optimism.

Egypt registered a 32.3, down from 55.6 six months ago. Of the Middle East countries, only the UAE posted lower results, registering a 29.6.

The Middle East as a region registered a neutral confidence rating of 49.9. Other regional countries in the survey included Saudi Arabia, Kuwait, Lebanon, and Qatar.

Of those, Qatar proved to be the most optimistic, earning a 71.4 on the index.

MasterCard also broke out the survey results by demographic constituency. Most of the distinctions were negligible, though Egyptian youth, under 30, tended to be slightly more pessimistic than the older crowd.

In Egypt, the survey was conducted in Alexandria and Cairo. Because of Egypt’s massive population, as compared to other regional countries, the company surveyed 600 Egyptians, as opposed to 400 for smaller countries.

The company limited survey respondents to those who had a preexisting relationship with a bank.

MasterCard started conducting the survey in 1994 in the Asia-Pacific region. In 2004, it brought the study to the Middle East. The first half 2009 report marked the 10th survey MasterCard has done in the region.

MasterCard also asked survey respondents about their saving habits. Gulf countries all said they were saving more than they had been six months prior. In Egypt, though, 63 percent of respondents admitted they were saving less.

This was an indication, said Rashid, that Egyptians generally enjoyed less discretionary income.

Egyptians also indicated that beyond precautionary saving, they were holding onto their excess cash in order to buy property. Property, as a saving priority, beat out consumer electronics and automotives.

One key finding was about how severely the economic downturn had hit consumers’ abilities to save. Only 2 percent of Egyptian respondents indicated they were likely to save more in the next six months, versus 51 percent who said they’d save less.

The survey also asked respondents to consider which areas they would be least likely to rein in their spending on, if they were forced to make spending cuts.

Unlike some Gulf States, which listed items like travel and fashion and accessories, Egyptians listed children’s education, property, and automobiles as their three most resilient spending categories.

The results of the last two surveys show that consumer confidence lags considerably behind macroeconomic conditions.

The second half 2008 survey, which came out in January of this year, was conducted last fall, right in the throes of the economic meltdown. All six of the Middle East countries surveyed, though, registered strongly optimistic outlooks at the time.

And now, with some economists predicting that the worst of the economic crisis may be over, consumers have painted a gloomy outlook through their responses to the latest survey.

Topics: FJP

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