Consumer confidence in Dubai surged to its highest level in 10 years during the third quarter of 2021. At 153 points, consumer confidence in Q3 was up 2 points over Q2 2021 and 20 points over Q3 2020. Dubai’s economy is expected to grow by 3.1 per cent in 2021 and by 3.4 per cent in 2022.

The Consumer Confidence Index is tracked by Dubai Economy. It showed that almost three in four Dubai consumers (73 per cent) were positive about their current job prospects. This compared to less than half (46 per cent) in the same quarter of the previous year.

Almost nine in 10 consumers (88 per cent) exuded optimism about job prospects in the next 12 months. This compared favourably to 77 per cent in Q3 2020. Europeans and Americans were the most optimistic (88 per cent) on current job prospects while Emiratis were the most optimistic (93 per cent) on job prospects in the next 12 months.

”The latest Consumer Confidence Index reflects an unprecedented level of positive sentiment towards the state of the economy and how Dubai successfully overcame the global economic challenges related to Covid-19 by reactivating the economic activity,” said Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection Sector in Dubai Economy.

“A clear proof of this optimism is 86 per cent of consumers believing that their current personal finances are good compared to 72 per cent in the same period of last year,” he said.

What’s buoying Dubai residents’ confidence?

Decade-high confidence levels are a thumping vindication of the city’s economic stimulus measures and the country’s accelerated vaccination campaign. Dubai has offered stimulus packages worth Dh7.1 billion since the outbreak of the pandemic to support the economy and business.

In June, Dubai reduced or cancelled fees for 88 government services. This reduced financial pressure on businesses, lowered the cost of living, supported investors and improved the business environment.

Dubai was among the first cities globally to open its doors to foreign visitors. Tourists have emerged as a contributor towards the rising business confidence. Travel, tourism and hospitality have witnessed a marked pickup in spending this year

The city was among the first globally to open its doors to foreign visitors. Tourists have emerged as a contributor towards the rising business confidence. The higher spending by residents and overseas visitors benefited major consumer sectors. Key Dubai sectors of travel, tourism and hospitality have witnessed a marked pickup in spending this year. Several retail majors saw robust sales over the first two weekends of Expo 2020 Dubai. 

Dubai Economy’s Lootah added that 82 per cent of consumers polled considered it a good time to buy things. This augured well for consumer spending and economic growth locally.

“The share of consumers who were positive about the state of the economy during the third quarter of this year has grown to 78 per cent from 57 per cent during the same period last year,” said Lootah. “Meanwhile, the third quarter Consumer Confidence Index also indicates positive sentiment prevailing among 85 per cent on the state of the economy for the next 12 months, compared to 72 per cent in the same quarter of 2020.”

What exactly is consumer confidence (and does it matter)?

Consumer confidence is a universally acknowledged indicator of a city or a country’s improving or failing economic health. It measures the degree of optimism people have about the state of the economy and their own financial situation.

Confident consumers tend to spend generously on goods and services, resulting in a virtuous cycle of demand and supply. High consumer confidence generally translates into more purchases, helping the economy to expand.

The UAE’s commercial capital is home to 3.4 million people. Its economy relies heavily on industries like hospitality, tourism, and retail, all of which received dramatic blows globally in 2020. With more than 132,000 rooms, Dubai has one of the world’s largest hospitality inventories. A majority of that lay idle during the strict lockdown that the city imposed in 2020.

Improved business activity, the beginning of the world’s biggest show Expo 2020 Dubai, and a world-beating vaccination drive have pushed Dubai’s consumer confidence to a 10-year high

Improved business activity, the beginning of the world’s biggest show Expo 2020 Dubai, and a world-beating vaccination drive helped change that. An increase in tourism, growth in business, and rise in promotional campaigns are factors driving positive sentiment in Dubai. The Index showed 44 per cent of consumers plan to spend their spare cash on holidays, 36 per cent on entertainment, and 33 per cent on clothes.

The turnaround in Dubai’s integral real estate sector is a testimony to the newfound buoyancy. Demand from overseas property investors has surged along with a steady increase in prices. The latest survey aligns with the bullish findings of the recent business confidence survey conducted by the Dubai Chamber of Commerce and Industry.