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UAE’s Professionals Remain Cautious With Spending, Latest Bayt.com And YouGov Study Reveals
Published Jul 20, 2009
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Almost half of UAE residents, 43%, have cut down on their household expenditure in response to the current recession, the highest cut among all of the countries surveyed around the Middle East, according to the latest study by the Middle East’s number one job site - Bayt.com in conjunction with research specialists YouGov.
The study found that across the rest of the surveyed countries however, only 30% of professionals have cut down on their household spending, while just over a quarter of respondents have actually increased their household budget.
“In similar research over the past six months, we have seen that UAE consumers are cutting back considerably on their spending. Now, despite some signs of optimism at the grass roots level in the global economy, it seems the trend of being more price conscious looks set to continue, at least in the short term,” said Nassim Ghrayeb, CEO of YouGov in the MENA region.
When it came down to the reasons why professionals have cut down on their household spending, the recession was the most common answer among GCC respondents, at 43%.
This was closely followed by cutbacks because the respondents or a member of their household had lost their job, at 37%.
The UAE’s figures were the highest in terms of cutting down household spending due to job losses with 45% reiterating this statement, closely followed by Kuwait at 44%, and Egypt at 41%.
Asked about whether they were willing to settle for a reduced salary in a new job in case of redundancy, only 31% of all respondents stated they would be willing to accept a reduced amount of pay, while 45% stated that they wouldn’t settle for any less.
In the UAE, the figure was higher than average:
38% of respondents stated they would be willing to accept a lower salary while 43% stated they wouldn’t.
The figures were similar around the region, with 37% in Lebanon willing to accept less salary, closely followed by Bahrain and Jordan at 36% each.
The study also asked the respondents how much less they would be willing to settle for, if they were to take up a new position.
Interestingly, unemployed professionals seemed far more willing to compromise:
49% of working professionals would not accept less than their current package, compared to only 27% of those currently unemployed, who were willing to accept less than their previous salary.
“There is a general consensus that the recession is having a sustained impact on the region, which of course manifests itself in the behaviour and attitudes of professionals living and working here. The recession naturally leads to a dearth in liquidity, which is made very clear by the fact that so many residents in the region have limited their spending. By conducting this study, we are shedding light on the extent of these limitations and how, overall, people feel they are dealing with the situation. This gives the region’s organisations valid information about how the recession is being played out by the people in the heart of the slump,” explained Amer Zureikat, Bayt.com’s Regional Manager.
The ‘Surviving the Recession’ study was conducted to gauge consumers’ opinions on their struggles during the global economic recession, to understand the impact the recession has had on a personal level and how it has impacted consumer spending and savings.
The study asked the respondents about their financial health both before and during the recession to ascertain how many professionals felt their financial position has changed.
Prior to the recession, 36% of all respondents felt they were better off than their peers, 39% felt they were the same, and 12% felt they were worse off.
During the recession, respondents generally felt their position had worsened: only 25% of all respondents feel better off than their peers, 39% feel their financial position is the same as their peers, and 22% feel it is worse.
In the UAE, the figures changed considerably. Before the recession, an overwhelming 41% of respondents felt financially better off than their peers, while only a quarter of respondents feel better off during the recession.
When asked about the reason for this change in their financial health almost half of respondents in the UAE 48%, cited it was due to job loss, and 23% stated it was due to a salary cut.
According to the study, job losses featured most strongly in the UAE, suggesting that redundancies have been much more widespread in the Emirates.
The effects of the recession on financial health have also spilled over into respondents’ investments.
21% of all respondents expect to sell investments to support themselves or their families during the recession: this jumped up to 24% in the UAE.
Most unaffected were respondents in Bahrain; 56% stated they do not foresee having to sell any assets, closely followed by Saudi Arabia and Algeria’s respondents, of whom, 48% each agreed their position would not reach a point where they had to sell.
Aside from cutting down on expenses, seeking employment in a different country is a popular option among all respondents during the recession; a quarter stated they have moved away.
In the UAE, residents have taken a number of steps to deal with the recession:
the study found that 14% of respondents have sent their families home, and 16% have moved to a less expensive area of the country.
Physical health was also found to be an issue during the recession; 27% stated it has personally caused them health concerns or issues including stress, and 13% stated that a family member’s health had been affected.
Most affected in the Gulf by the recession were respondents in the UAE, with 31% undergoing personal health concerns and 13% with family members with health concerns.
This was closely followed by Kuwait, with 29% undergoing personal health concerns and 14% with family members affected.
“Aside from the financial and job related concerns that respondents across the region have, what we are witnessing is that the effects of the recession are permeating into people’s lives, to the point where their physical and mental health is affected something that is not often heard about. This kind of topical, up to the minute and direct data provides a very candid look into how people are dealing with the current economic climate, which gives HR professionals and other industry stakeholders a very plain insight into how the recession is being played out on a grassroots level,” stated Ghrayeb.
“These findings send a clear message to employers that many professionals across the region are suffering at the moment. Taking action to address the issues highlighted may well serve to give organisations competitive advantage for when the recessionary pressures ease,” concluded Zureikat.
Data for the Surviving the Recession study was collected online between the period of 26th May and 28th June 2009 with 12,908 respondents from across the UAE, KSA, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan. Males and females aged over 18 years old, of all nationalities, were included in the study.
For further enquiries:
Bayt.com contacts
Peggy Chamoun
Senior Marketing Manager
peg@bayt.net
Tel: 04 391 1900
YouGov contacts:
Joanna Longworth
Chief Marketing Officer
joanna.longworth@yougovsiraj.com
Tel: 04 367 0340
Mobile: 050 848 7038
Souraya Dally
Manning, Selvage & Lee
Tel: +971 4 3676170
Fax: +971 4 367 2615
Email: souraya.dally@dubai.mslpr.com
Posted by
VMD - [Virtual Marketing Department]
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