Qatar’s Non-Energy Business Conditions See Accelerated Improvement in February
Qatar experienced a quicker improvement in its non-energy business sector during February, marking a significant upturn from the previous month.
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The Purchasing Managers’ Index (PMI) for Qatar reached 51.0, a rise from 50.4 in the preceding month, indicating an overall improvement in business conditions, as scores above 50.0 indicate improvement.
There was a notable acceleration in both company output and job creation, alongside developments in managing work backlogs. This progress was highlighted in the Qatar Financial Centre (QFC) report, which also noted a more positive outlook for the coming 12 months.
According to QFC, companies showed a tendency towards reducing their purchasing activities, favouring a reduction in stock levels for the third consecutive month in a bid for increased efficiency.
The report also pointed out that price pressures were minimal, with a modest rise in average input costs and a significant decrease in charges, the sharpest drop in two years.
The demand for goods and services within Qatar’s non-energy sector continued its upward trend in February, primarily attributed to acquiring new customers and the opening of new branches, as per QFC’s findings.
Activity levels surged to their highest in three months during February, yet this growth was still below the robust average seen in 2023. Business confidence improved considerably in February, reaching its peak since the previous September, spurred by plans for business expansion, new clientele, and marketing initiatives.
Despite a rise in average input prices due to increased wages and purchasing costs, overall cost pressures remained low. Output prices declined for the fourth consecutive month, marking the most significant drop since February 2022.
The financial services sector saw a continued rise in employment for the eleventh consecutive month, achieving the quickest growth rate since September. Furthermore, average fees charged by these firms saw a decline for the second successive month, recording the largest decrease since October 2022, while inflation in input costs within the sector stayed low, as stated by QFC.
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Employment grew for the 16th consecutive month as companies expanded.
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According to a recent PMI report, Qatar experienced its fastest non-energy sector growth in almost two years in June, driven by surges in both existing and new business activities.
The Purchasing Managers’ Index (PMI) headline figure for Qatar reached 55.9 in June, up from 53.6 in May, with anything above 50.0 indicating growth in business activity. Employment also grew for the 16th month in a row, and the country’s 12-month outlook remained robust.
The inflationary pressures were muted, with input prices rising only slightly since May, while prices charged for goods and services fell, according to the Qatar Financial Centre (QFC) report.
This headline figure marked the strongest improvement in business conditions in the non-energy private sector since July 2022 and was above the long-term trend.
The report noted that new incoming work expanded at the fastest rate in 13 months, with significant growth in manufacturing and construction and sharp growth in other sectors. Despite the rising demand for goods and services, companies managed to further reduce the volume of outstanding work in June.
Companies attributed positive forecasts to new branch openings, acquiring new customers, and marketing campaigns. Prices for goods and services fell for the sixth time in the past eight months as firms offered discounts to boost competitiveness and attract new customers.
Qatari financial services companies also recorded further strengthening in growth, with the Financial Services Business Activity and New Business Indexes reaching 13- and nine-month highs of 61.1 and 59.2, respectively. These levels were above the long-term trend since 2017.
Yousuf Mohamed Al-Jaida, QFC CEO, said the June PMI index was higher than in all pre-pandemic months except for October 2017, which was 56.3. “Growth has now accelerated five times in the first half of 2024 as the non-energy economy has rebounded from a moderation in the second half of 2023,” he said.
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