Doha’s non-energy private sector business faced disruption in March as restrictions on travel and business activities were abruptly put in place in view of the global coronavirus outbreak, according to the Purchasing Managers Index (PMI) survey of the Qatar Financial Center (QFC).
The headline PMI, which tracks real-time business metrics, declined for only the third time in eight months to its lowest level since August 2019.
“The accelerating global coronavirus outbreak interrupted the recent upward momentum of the Qatari non-energy private sector economy in March, according to the latest PMI data,” said Sheikha Alanoud bint Hamad al-Thani, managing director (Business Development), QFC Authority.
The Qatar PMI indices are compiled from survey responses from a panel of about 400 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.
As elsewhere in the world, the PMI indicators for output, new orders and purchasing all dropped sharply from their February levels and the 12-month outlook for total activity moderated further, reflecting great uncertainty surrounding the global economic impact of the pandemic. More positively, employment in the Qatari non-energy private sector economy rose for the second month running, with the manufacturing and wholesale and retail sectors boosting job creation.
Driven by the onset of the novel coronavirus, the PMI fell to 46.6 in March from 49.3 in February, the lowest reading since August 2019 and below the three-year long-run trend level of 49.8.
Data for January and February were signalling the strongest quarterly performance since the first quarter (Q1) 2019, but the weak March figure resulting from the virus-related disruption brought the Q1 PMI average down to 48.2, little-changed from 48.3 in the fourth quarter of 2019 but still higher than third quarter of 2019 (46.9).
At the sub-sector level, manufacturing posted the strongest overall performance in March, and services the weakest. This is in line with reports that key sections of the economy, including industrial facilities in Ras Laffan, have been able to continue production as usual.
Services, however, have been directly affected by government-mandated shutdowns that are in the interest of maintaining public health.
Whereas PMI readings fell due to slower current and future orders, several underlying improvements couched the fall in the headline figure. While the aggregate picture suggests slowing activity, there were also several promising signs for Qatar’s private sector.
Latest data on prices suggested improving profitability at non-energy private sector companies, as overall input prices fell slightly while prices charged for goods and services rose at the fastest rate since January 2018.
The average labour costs fell for the fourth month running, albeit only slightly.
“With great uncertainty surrounding the long-term impact of the outbreak on the global economy, firms’ expectations for activity were broadly neutral in March. More positively, employment increased further and prices charged for goods and services rose at the fastest rate since January 2018,” Sheikha Alanoud said.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Europe’s factories starting to recover, Asia’s pain worsens
QST to host 1st ‘Digital Demo Day’ on June 8
GCC pegged exchange rate regimes likely to remain in place: S&P
Cybersecurity vital in building trust in e-commerce, says IT expert
QSE gains 175 points to cross 9,000 levels on global easing of lockdowns
QSE conventional brokerages seen improving share in trade turnover
Governments must start bolstering economic infrastructure to boost recovery, says al-Jaida
Stronger US-Qatar ties seen post Covid-19: US Chamber officials
Vodafone Qatar in deal with Microsoft on collaborative olutions for remote business teams