GCC consumers currently the most positive according to latest McKinsey poll

03 April 2020 Consultancy-me.com

Global consulting giant McKinsey & Company has reached out to consumers around the world to assess their current state of economic confidence, with those in Saudi Arabia and the UAE proving by far the most optimistic in the face of the ongoing coronavirus pandemic.   

McKinsey & Company boss Kevin Sneader recently made the comment that following the coronavirus crisis nothing would return to normal, but a new survey from the management consulting giant suggests that the citizens of Saudi Arabia and the UAE might not share the same view – with almost 60 percent of those canvassed expressing confidence that the economy will grow to become “just as strong or stronger” than prior to the pandemic.

Notably, the MBB firm had only just released its annual global consumer confidence survey report in the month before last, but with a monumentally altered business and consumer landscape in the weeks since has returned to the polls, taking the pulse of consumers in a number of the world’s leading economies and those most impacted to date – including the US, UK, Italy, Germany, France, and Spain along with Saudi Arabia and the UAE.

According to the poll conducted between the 23rd and 26th of  March (and covering roughly 1,000 consumers in each nation), both the KSA and UAE came out well on top compared to respondents abroad in terms of economic confidence – expressing faith in a return to growth at a respective rate of 58 and 57 percent. While it should be noted that they’re also among the least impacted by the viral outbreak to date, the difference in opinion is stark.

Saudis are relatively optimistic about recovery in next few monthsAs a comparison, just 16 percent of respondents in the UK felt that the economy would rebound within two to three months after the crisis had subsided and return to a former pattern of growth - and while the UK is also facing the dual economic shock of Brexit, residents in stable economies such as Germany weren’t all that much more positive, with the nation registering such optimism at just 25 percent. The US remained optimistic at a figure of 41 percent.

But for Italy and Spain, two of the worst hit countries so far, the positive sentiment sat at just 11 and 14 percent, while in Japan – which appears to have gained some control over the viral spread despite experiencing an early threat – confidence was at absolute rock bottom, at just 6 percent. The one bright spot in the data, with respect to confidence being the actual driver of markets, there appears to be growing positivity in China as the country emerges over the hump.

In an earlier poll taken in China between the 21st and 24th of February, local respondents were optimistic about a return to economic growth at a rate of 43 percent, a figure which had grown to 48 percent roughly four weeks later – while those who were still unsure and suspected the economy would be impacted for six and twelve months or longer and likely stagnate dropped from 56 to 46 percent, although has been a slight creep in negativity since.

In an interview with The National, McKinsey Middle East’s Consumer & retail practice lead Abdellah Iftahy reiterated the early caveat that the UAE and KSA were still in the early stages of the Covid-19 contagion curve when the latest survey was conducted, but added that emerging trends such as a five-fold growth in demand for online grocery shopping, albeit tied to the current situation, were likely to be retained by consumers going forward.