Qatar saw strongest improvement in business conditions in non-energy private sector since July 2022 on accelerated growth in output, new orders, employment and purchasing, according to the Qatar Financial Centre (QFC).
The PMI rose for the sixth time in seven months to 55.6 in May, from 54.4 in April, indicating the strongest improvement in business conditions since July 2022. The latest figure moved further above the long-run trend of 52.3.
"Qatar's non-energy private sector remained on an upward growth trajectory in May, as inflows of new business accelerated in part due to tourism and demand for financial services," said Yousuf Mohamed al-Jaida, chief executive officer, QFC Authority.
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 headline QFC 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 figure was mainly boosted by the output and new orders components in May, while employment and stocks of purchases also had positive overall contributions.
New business increased at the fastest rate in ten months in May. Companies reported signing new contracts with both existing and new customers, alongside new product offerings and tourism demand. New business in financial services was also a strong point in the latest findings.
Total business activity rose further in May. Output has risen every month for almost three years straight, except for a brief correction in January following the conclusion of the FIFA World Cup Qatar 2022. The rate of expansion in May was the strongest of 2023 so far and well above the six-year survey trend.
The 12-month outlook for the non-energy private sector improved in May. The Future Output Index rose for the first time in three months to 59.2, with confidence strengthening in the services, wholesale and retail, and construction sectors.
Non-oil private sector employment rose to the greatest degree since July 2022, helping firms to further reduce their levels of outstanding business in May. Demand for inputs strengthened, but supply chains coped admirably as average lead times were cut again.
According to the QFC PMI, May data signalled a strong month for financial services companies in Qatar. Rates of expansion in new business and total activity both accelerated since April, and the 12-month outlook strengthened.
"Financial services continued to outperform the wider economy, with its key indices for activity and new business registering 61.4 and 61.8, respectively. Financial services firms also raised their charges, in contrast to little change across the non-energy sector as a whole," al-Jaida said.
Yousuf Mohamed al-Jaida, chief executive officer, QFC Authority.