Business optimism in Qatar has soared to its highest level in nearly three years, according to the Dun & Bradstreet Business Optimism Index for Qatar in the fourth quarter of 2013.
The index reveals that optimism is at a level unsurpassed for 11 quarters.
Sponsored by the Qatar Financial Centre Authority (QFC Authority), the survey also reveals that optimism in the finance, real estate and business services sector has reached its highest level in the last three years.
At a year-on-year growth of 15.4%, the sector has been the fastest growing in Qatar.
The index for the consolidated non-hydrocarbon sector was 53, up 14 points from Q3, 2013 and around 15 points from Q4, 2012 levels.
The index value in Q4, 2013 is the highest recorded reading since Q1, 2011, when it touched 61 points, showing that economic diversification in Qatar is gathering momentum.
Other indicators also provide evidence for the strength of Qatar’s economy. The profitability expectations of the finance, real estate and business services sector have risen sharply over the last year (58 points in Q4, 2013 from 21 points in Q4, 2012).
At the same time, nearly 50% of small-and-medium-sized companies surveyed in the sector plan to hire in this quarter, the survey said.
In the hydrocarbon sector, optimism is at the highest level (29, up from 17 in Q4, 2012 and 13 in Q3, 2013) as it has been in the last two years, supported by a positive outlook for sales volumes, profits and hiring.
In manufacturing, optimism is at its highest among the non-hydrocarbon sectors (53, up from 33 in Q4, 2012 and 35 in Q3, 2013) for three years, driven by a “very optimistic” outlook for sales and demand.
Construction also is at the “most optimistic level” (53, up from 29 in Q4, 2012 and 36 in Q3, 2013) as it has been in the last three years, partly because of sharp rises in expectations for selling prices and profits and strongly supported by the sector’s expectations for hiring.
In trade and hospitality, optimism (52, up from 34 in Q4, 2012 and 34 in Q3, 2013) is close to the all-time high of 56 reached in Q1, 2011, driven by “strong expectations” on sales, demand for new orders and in particular profitability.
Optimism is recovering (50, up from 45 in Q4 2012 and 43 in Q3 2013) in transport and communications on the basis of what the survey said “a strong outlook for profitability”. The sector has the highest number of respondents (81%), within the non-hydrocarbon group, which does not foresee any negative factors impacting business in Q4.
Yousef M al-Jaida, QFC Authority chief strategic development officer said, “The sharp increase in optimism shows how strong and resilient the Qatar economy is. In particular, the finance, real estate and business services sector is maturing rapidly and is a major force behind economic diversification, playing a leading role in supporting the country’s development.”
Prashant Kumar, associate director, Dun & Bradstreet South Asia Middle East said, “The Q4, 2013 BOI indicates rising optimism levels across all sectors in Qatar. Both the non-hydrocarbon and hydrocarbon sector scores have recovered after a period of decline during the last two to three quarters. Amongst the key sectors, the finance, real estate and business services sector and the construction and manufacturing sectors reflect the highest optimism levels. It is encouraging to see that 72% of the non-hydrocarbon sector respondents expect that no negative factors or challenges will affect their business operations in Q4, 2013, a significant increase from the previous quarter’s 58%. For the remaining 28%, competition and delays in payment and receivables continue to be the key challenges.”
‘Trafigura buys Qatari condensate at higher premium for Q1, 2014’
European trader Trafigura has bought Qatari condensate volumes for the first quarter of 2014 at higher premiums, trade sources said yesterday.
Trafigura will lift at least a cargo each of deodorised field condensate (DFC) and low sulphur condensate (LSC) per month, they said, adding that the first-quarter premium for DFC was at $3.50-$4 a barrel to the Qatar Condensate Price (QCP), up from close to $2 in the fourth quarter.
Another trading house was awarded a DFC cargo each month in the tender held by Qatari oil marketer Tasweeq, they said.
Officials at Tasweeq and Trafigura declined to comment.
Traders attributed the higher premium to Trafigura’s attempt to secure term barrels from Qatar to meet rising condensate demand from Asia where three new splitters will commence operation next year.
“They want a sustainable volume which they can trade,” a trader said, but added that the continuation of supply will depend on price negotiations every quarter.
Trafigura became more active in the condensate market in the second half this year after former Shell trader Mattijs van der Gaag joined the company.