Qatar's non-energy private sector, especially manufacturing and construction, displayed a rosy picture this February, on higher output and new businesses as well as elevated demand and better employment prospects, indicating rebound in the country's economy, according to the Qatar Financial Centre (QFC).
The latest Purchasing Managers’ Index (PMI) survey data from the QFC and IHS Markit indicated manufacturing was the strongest performer in February, with its PMI reaching a six-month high, followed by construction, wholesale and retail and services respectively, indicating a sustained strong upturn in the non-energy private sector economy at the start of 2021.
Supply chains remained stable despite a ramping up of purchasing activity, and firms were also able to keep on top of levels of outstanding business during the month, it said, adding the expectations regarding output over the next 12 months continued to be positive.
As a further indication of businesses adjusting to healthy demand, firms raised their prices charged for goods and services at one of the fastest rates since the survey began in April 2017.
"The non-energy private sector of Qatar continued its strong start to 2021 in February... The three main components of the PMI remained strong, with further marked expansions in output and new business supporting a record run of continuous employment growth," said Sheikha Alanoud bint Hamad al-Thani, managing director, Business Development, QFC Authority.
The Qatar PMI index are compiled from survey responses from a panel of about 400 private sector companies, which cover the manufacturing, construction, wholesale, retail, and services sectors, and reflects the structure of the non-energy economy according to official national accounts data.
The PMI registered 53.2 in February, slightly down from 53.9 in January. The latest figure signalled continued strong non-energy business conditions, and was the fifth-highest level ever registered by the survey, below the peaks seen last July (59.8) and August (57.3) when the economy rebounded rapidly from the first wave of Covid-19, and lower than that recorded in October 2017 (56.3) when domestic economy boomed after inducement generated by the Gulf crisis.
The strongest influences came from new orders and output, although both sub-indices corrected slightly since January. Meanwhile, employment, suppliers' delivery times and stocks of purchases all had slightly positive directional influences in February compared to January.
Non-energy firms boosted capacity in February with a further round of job creation and purchasing growth. Subsequently, backlogs were stable despite the strong rise in new business, it said; adding companies were also able to stock up on inputs for the third month running, the longest sequence of inventory growth signalled by the survey so far.
Boding well for profitability in the non-energy economy, overall input costs were down in February while prices charged for goods and services rose.
The monthly PMI can be aggregated to a quarterly average to enable comparisons with official gross domestic product (GDP).
The latest official data reported a year-on-year decline of 4.5% in real terms in the third quarter of 2020, although the economy rebounded by 5.6% from the previous quarter.
The PMI data for the fourth quarter are consistent with a recovery in growth, while data for January and February are signalling the strongest quarterly expansion since the fourth quarter of 2017.
"Recent PMI data suggest that the non-energy economy is now recovering well and will support a rebound in the official GDP numbers," Sheikha Alanoud said.
