Demand gained momentum in Qatar's non-energy private sector, which led to faster growth of overall activity, a boost to employment and a fortification of firms' expectations for the next 12 months, according to the Qatar Financial Centre (QFC).
The latest Purchasing Managers’ Index (PMI) survey data from the QFC for March showed the index at an eight-month high, indicating a further strengthening in business conditions as it saw fastest rise in new business since July 2022.
The headline PMI is a composite single-figure indicator of non-energy private sector performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
The PMI rose for the fourth time in five months to 53.8 in March, from 51.9 in February. The latest figure was still above the long-run trend of 52.2.
"Qatar's non-energy private sector accelerated at the end of the first quarter, with sharper increases in output and new business. Both sub-indices were tracking above their long-run trend levels over six years of data collection. The headline PMI was at an eight-month high, also boosted by the employment component," said QFC Authority chief executive officer Yousuf Mohamed al-Jaida.
The Qatar PMI indices are compiled from survey responses from a panel of around 450 private sector companies. The panel covers the manufacturing, construction, wholesale, retail, and services sectors, and reflects the structure of the non-energy economy according to official national accounts data.
The boost to the headline PMI was faster growth in output and new business, which both increased at rates stronger than their long-run averages following renewed uplifts in January. Firms reported new customers, tourism, investments and successful marketing. The wholesale and retail and services sectors registered the strongest growth rates for activity and new orders.
Highlighting that the 12-month outlook for the non-energy private sector remained "strongly positive", it said sector wise, confidence was strongest among service providers, followed by manufacturers during the review period.
"Looking forward, the future output index eased from February's 41-month high of 82.7 but has averaged 77 over the first quarter as a whole, the strongest quarterly outlook since the third quarter of 2019," al-Jaida said.
The March data indicated a further increase in average wages and salaries, although the staff costs index eased from February's 17-month high. The employment index, tracking the overall level of staffing, rose to an eight-month high, signalling a boost to workforce numbers.
Overall cost pressures eased further since the start of the year and were modest, reflecting only a fractional rise in purchase prices. Meanwhile, firms cut charges for goods and services for the second time in three months, albeit marginally.
Companies reduced their levels of outstanding business for the eighth month running in March, despite the faster rise in new work. This reflected the rise in staffing but also suggested firms had made productivity improvements.
The financial services sector in Qatar continued to expand at a marked rate in March as the volume of new business increased sharply and for the thirty-fourth consecutive month.
Overall financial services activity increased for the twenty-first successive month, and at a rapid pace, while expectations eased further from January's recent peak but remained elevated.
“The financial services sector continued to be a key spur to overall growth in March, with the rates of expansion in activity and new business remaining stronger than the all-sector trends, and the financial services business activity index reaching 60.5,” according to al-Jaida.
New business grew for the thirty-fourth consecutive month in March, and the rate of expansion remained strong despite easing to a two-month low. Employment was fractionally lower than in February.
The March data indicated another strong increase in charges levied by financial services firms, albeit one down on February's record rate of inflation. Input costs were again little changed over the month.
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