Housing is The Top Consumer Spending Category in the UAE
Among GCC countries, consumer spending per household in the UAE was highest during Y 2016 at $103,000
Consumer spending in the UAE is expected to exceed $261-B in Y 2021, compared to nearly $183-B in Y 2016, according to research released by the Dubai Chamber of Commerce and Industry.
Spending is set to grow at a compound annual growth rate (CAGR) of 7.5% over the next 5 years, it found.
The research, based on recent data from Euromonitor International, revealed that consumer expenditure per household during Y 2016 in the UAE (around $103,000) was the highest when compared to other GCC countries.
The analysis also showed that consumer spending accounted on average for about 45 per cent of the UAE’s GDP, compared to a 39% average for the GCC region, 45% for developing Asia, 56% for the EU, and 68% for the US.
Looking at consumer spending in the UAE in Y 2016, housing was identified as The Top category with $75.7-B, accounting for 41% of total expenditure during the year.
Food and non-alcoholic beverages came 2nd with $24.8-B worth of spending during the year, followed by transport at $16.7-B.
“The UAE’s consumer market is largely being driven by a fast-growing population with relatively high incomes – Key economic fundamentals that support a robust long-term outlook for spending growth in the country,” said Hamad Buamim, president and CEO of Dubai Chamber.
Mr. Buamim pointed out that the UAE’s predominantly young and diverse population is attracting international brands and a growing number of e-Commerce companies.
He also noted that the country’s booming tourism market continues to drive consumer spending, especially within the retail, tourism, hospitality, and transport sectors.
Looking ahead, several new mega developments are expected to be completed over the next 4 years in the UAE, which should diversify the country’s mix of retail and entertainment offerings, and lead to increased consumer spending.
According to the research, communication was identified as the fastest-growing category for UAE consumer spending with a CAGR of 10.2% through Y 2021.
The trend is likely to be supported by the country’s high penetration of smartphones and other digital devices. The growing popularity of mobile applications, and Dubai’s adoption of smart city solutions are also expected to boost spending in this area, the report said.
Health goods and medical services was named as the second fastest-growing category for spending with an expected CAGR of 8.2% over the same frame, followed by hotels and catering CAGR at 8.1%.
Education at 8% and leisure at 7.7% are also expected to see strong growth.
By Aarti Nagraj
Paul Ebeling, Editor