Consumer Confidence on Continuous Improvement

ARA Research & Consultancy has released its Consumer Confidence Index in Kuwait for June 2024, under the sponsorship of Lexus.

ARA’s Consumer Confidence Index maintained its optimistic outlook, reaching 117 points by the end of June, with a 3-point increase from the previous month, securing the highest rank since October 2022. This increase follows the remarkable leap in May when the Index surged by 9 points. Thus, the continued increase in June confirms and complements the prevailing sense of optimism particularly among citizens.

ARA’s Consumer Confidence Index has witnessed consecutive record increases among Kuwaitis, with a 10-point increase in June following a 12-point increase in May after the dissolution of the National Assembly.

Meanwhile, Arab residents haven't been significantly affected by the general wave of optimism, as the General Index maintained its fluctuations within a narrow margin over the past six months, registering 110 points at the end of June, a decrease of 3 points compared to May.

Despite the state of optimism prevailing on both men and women, females tend to be more reserved than males. The Confidence Index maintained its level among females, recording 108 points with a slight decrease of one point in June, compared to the Confidence Index registering 122 points among males, with a 5-point increase.

The current situation indexes achieved remarkable increases, while future confidence indexes maintained their high levels achieved in May. This suggests that the improvements have started to yield results, as shown through the detailed indicators.

Significant Improvement in Current Confidence Indicators

The Current Economic Situation Index increased to 111 points, adding 4 points in June, achieving its highest level in over six years.

Similarly, the Current Personal Income Index increased to 104 points, adding 2 points to its balance, reaching the highest level since October 2022.

In the public sector, wages and salaries for workers and employees have generally increased in line with inflation rates during this period to protect the purchasing power of all categories working in the government sector. Moreover, additional incentives and grants were paid to those who deserve them, and some were promoted.

Whereas in the private sector, wage increases were primarily linked to the financial conditions achieved. For example, banks significantly raised wages and salaries, as did other economic sectors that recorded financial profits. While some companies and institutions in the private sector could not provide wage increases that align with the current circumstances.

Highest Job Market Activity Index

The most notable increase was observed in the Current Employment Opportunities Index, which recorded 154 points, an increase of 31 points in June, marking its highest level since October 2022. This result indicates that optimism in the future has begun to yield results. Following the government's decision to expedite developmental projects and the awarding of several projects in the oil sector and other sectors, the "Era of Projects Implementation" in Kuwait has started to bear fruit.

It is important to note that addressing seriously the issues related to public funds and citizenship infringements, has reflected positively on raising citizens' confidence in achieving actual accomplishments.

Future Indexes Maintain their High Levels

Following an unprecedented increase in May, the Expected Economic Situation Index adjusted its level by decreasing 4 points, to maintain its high level at 123 points.

Meanwhile, the Expected Personal Income Index increased by one point, reaching 110 points, which is also considered one of the higher levels for the index.

The index also increased by 8 points among citizens, while it declined by 8 points among Arab residents. This disparity is natural due to the differences in results between the situation and the capabilities of the public and private sectors, as well as among various companies, institutions, and professions.

Stability in the Purchase Index

The Purchase of Durable Goods Index remained stable at 114 points, declining by one point on a monthly basis. The beginning of the summer season could be one of the reasons for the relative stability of the Purchasing Index. During this period, some citizens and expatriates begin to travel abroad for vacations, delaying decisions to purchase durable goods until after the holiday season.

Nonetheless, we will monitor the market trends and consumer attitudes and convictions in the coming months. It is important to note that rising prices due to inflation and other emerging factors related to the law of supply and demand, as well as increased transportation and insurance costs, among other factors, have elevated price levels and exerted pressure on the desire to purchase durable goods.

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