Qatar's non-energy private sector recorded a stronger improvement in business conditions in February 2024, according to the latest Purchasing Managers' Index (PMI) survey data from Qatar Financial Centre (QFC) compiled by S&P Global. Output and employment both increased at faster rates, and new business growth was maintained. Companies were also able to make progress on volumes of outstanding work during the month, and the 12-month outlook improved. A reduction in purchasing activity revealed a preference for destocking, with inventories falling slightly for the third month running as firms sought efficiency gains. Price pressures remained subdued, with average input costs rising only modestly and charges falling at the strongest rate in two years.
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 Qatar Financial Centre 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 registered 51.0 in February, up from 50.4 in January. The latest figure moved further above the no-change mark of 50.0 and thereby signalled a faster improvement in business conditions in the non-energy private sector economy.
Of the five components of the headline figure, output, new orders and employment all registered above 50.0 index readings in February, indicative of month-on-month expansions. These were partly offset by shorter suppliers' delivery times and a reduction in input stocks.
Demand for goods and services in Qatar's non-energy economy continued to expand in February. Companies widely linked new orders to new customers and branch openings. The rate of growth eased since January, enabling a reduction in the volume of outstanding business.
Total activity increased at the fastest rate in three months in February, although growth remained below the strong average for 2023.
Looking ahead towards the next 12 months, companies were increasingly optimistic on growth in February. Overall sentiment was the strongest since last September, linked to business development plans, new clients and marketing campaigns.
Qatari firms continued to raise employment, extending the current sequence of growth to 12 months. Purchases of inputs fell further, however, as firms continued to trim inventories. This further alleviated pressure on supply chains, as lead times shortened for the twenty-second successive month.
Average input prices rose in February, driven by both wages and purchase costs, but overall cost pressures were muted. Output prices fell for the fourth straight month, and the most since February 2022.
Qatari financial services companies recorded faster growth in volumes of total business activity and new contracts in February. The seasonally adjusted Financial Services Business Activity and New Business Indexes posted 51.3 and 51.4 respectively, in each case rising since January. Companies were also more optimistic regarding the 12-month outlook for activity.
Meanwhile, employment at financial services firms rose for the eleventh month running, and at the fastest pace since last September.
In terms of prices, average charges set by financial services companies fell for the second month running, and the most since October 2022. Meanwhile input cost inflation in the sector remained weak.
Chief Executive Officer, QFC Authority, Yousuf Mohamed Al Jaida said: "The PMI rose further in February, reflecting sharper gains in output and employment in the Qatari non-energy economy. So far in 2024 the headline index is trending in line with the average for the fourth quarter of 2023, indicating sustained economic growth.
"Although new orders did not rise by as much as in January, the 12-month outlook brightened with firms at their most confident since last September. Companies are taking on staff at the fastest rate in five months, with financial services registering the strongest job creation. The sector also posted faster new business expansion in February, bucking the wider trend."
Purchasing Managers' Index (PMI) surveys are now available for over 40 countries and for key regions including the Eurozone. They are the most closely watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends.
The Qatar Financial Centre PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 450 private sector companies. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. The sectors covered by the survey include manufacturing, construction, wholesale, retail, and services. (QNA)
