- GCC consumer confidence in the economy, business, and employment in December declined 1.2%, down to 65.3% from 66.5% in November
- Saudi consumer confidence declined by 2.6% in December to 47.5% from 50.1% in November
- The Sila Consumer Sentiment Index, produced and developed by D/A, utilises AI technology to measure consumer confidence amongst Arabic speakers
Saudi Arabia, 11 January 2022: According to the latest research by leading consumer intelligence platform, D/A, owners of Sila, an Arabic-native, AI-enabled consumer intelligence platform, despite a general decline in net positivity across all global markets, the GCC’s Arabic speakers remained mainly immune to many of the global agitators regarding business, economy and employment confidence.
The data, which is based on algorithmic AI analysis of over 100 million Arabic social media posts, was highlighted in the December 2021 Sila Consumer Sentiment Index (CSI) report, which was released today, Tuesday 11 January and revealed that the GCC remained relatively immune to the key issues affecting consumer sentiment on a global level.
Overall, GCC consumer confidence in December declined 1.2%, down to 65.3% from 66.5% in November and 66.3% in October. These modest declines are attributed to global dynamics, including inflationary pressure on consumer spending, uncertainty around variants of COVID-19 and the resulting impacts on daily life, and government support for the economy via maintained spending and reforms.
Business confidence has sustained a more considerable setback of almost 2% month-on-month, from 61.3% in November to 59.5% in December. However, it is still registering net positivity and trending above pre-pandemic levels.
From an economic perspective, macro/government intervention in GCC economies saw a 3.7% increase in confidence in December, marking a two-year series high in economic growth sentiment, a significant consumer confidence indicator.
Consumer confidence around employment declined by 1.3% month-on-month to 81% in December and 1.5% below October’s reading of 82.5%. This trend still presents a significant shift from the pre-pandemic level of 87.9% recorded in February 2020 and the 86.1% noted in June 2021, indicating a more inconsistent recovery concerning this marker.
Paul Kelly, the Managing Partner of D/A, said: “We have seen a clear uptick in consumer confidence from an economic perspective. The extensive vaccination programme across the region has undoubtedly had a positive impact, and consumers have become more optimistic about the future economic situation in the region. This confidence does, however, have to be tempered by the slight declines in consumer confidence surrounding business and employment in the GCC, as result of the ongoing challenges of the pandemic.”
In Saudi Arabia, overall, consumer confidence declined by 2.6% in December to 47.5% from 50.1% in November. These figures have witnessed a continued downward trend from the June 2021 highs of 55.9% and the pre-pandemic positivity of January 2020 of 69.9%.
Confidence in the private sector witnessed a decline of 1.5% month-on-month from 30.7% in November to 29.3% in December, translating to a net negative consumer outlook of 70.7% toward private enterprise within Saudi Arabia.
“Although the Saudi government has engaged in extensive intervention in the economy, these initiatives have not necessarily funnelled down to the private sector yet, which is demonstrated by the discrepancy between current and pre-pandemic net negativity levels of 50.5% (January 2020),” said Kelly.
Saudi has, however, seen a substantial increase of 2.8% in net positivity toward the overall economy from November’s reading of 86% to 88.8% in December and marks the highest level since March 2021. The growth in confidence has been driven by government intervention and reforms encouraging sectors such as real estate and tourism to employ more Saudi nationals.
Confidence in employment, in the meantime, has endured a marginal but fourth consecutive decrease to 85.9% this month – only a minor contraction from an 86.2% net positive reading in November.
“This implies that a significantly high portion of those in Saudi Arabia are confident in the state of their
employment and is therefore likely to engage in consumption in a manner that may trickle down to private enterprise later in 2022,” concluded Kelly. The Sila Consumer Sentiment Index provides various tools to aid in consumer intelligence such as brand perception tracking, sentiment and audience analysis, demographics, trend and topic analyses and more. The sentiment models inside Sila are a result of proprietary Arabic-dialect native, natural language processing models.