Doha, Qatar–Qatar’s non-energy private sector witnessed strong expansion in August on the back of new orders in the manufacturing and financial services, according to the Qatar Financial Centre (QFC).
The expansion rate was the third strongest so far in this year, according to the QFC’s latest purchasing managers’ index (PMI) survey, with the 12-month outlook for the non-energy private sector remaining “optimistic”.
“The PMI for Qatar has held steady over the past six months at a level consistent with solid economic growth…Activity, new business, employment and purchasing all rose further in August, while the level of outstanding work continued to fall as capacity expanded,” said QFC Authority chief executive officer Yousuf Mohamed al-Jaida.
The PMI posted 53.9 in August, little-changed from 54 in July, indicating another strong improvement in business conditions. The latest figure remained above the average for the first half of 2023 (52.5) and the long-run trend since 2017 (52.3).
The PMI indices are compiled from survey responses from a panel of around 450 private sector companies. It covers the manufacturing, construction, wholesale, retail, and services sectors, reflecting 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.
New business increased strongly in August, the survey said, adding the rate of expansion eased further from May’s recent peak but remained well above the long-run survey average. There was a notable boost to new orders at manufacturing and financial services businesses during the month.
Total business activity among Qatar’s non-energy private sector firms rose further in August. Output has risen every month for more than three years, except for a brief correction in January following the conclusion of the FIFA World Cup Qatar 2022.
About the 12-month optimistic outlook for the non-energy private sector, QFC said positive expectations were broad-based by sector with manufacturers being the most optimistic, followed by wholesalers and retailers.
“Financial services continued to outperform the wider economy with new business increasing at the fastest pace in the year. This prompted the sharpest rise in hiring by financial services firms since October 2021,” al-Jaida said.
Non-oil private sector employment expanded for the sixth month running in August, the second-longest sequence of continuous job creation in the survey history. Recruitment was again notably strong at service providers.
Purchases also rose for the sixth consecutive month in August. Despite higher demand for inputs, supply chains continued to improve as average lead times fell for the sixteenth successive month, a series-record sequence. The survey said the input inventories rose only slightly again, suggesting companies continued to manage stock levels efficiently.
Demand for Qatari financial services accelerated in August, with new business volumes at financial services providers increasing at the fastest pace since August 2022. Total financial services activity increased at a marked rate in line with the six-and-a-half-year series average, and the 12-month outlook remained positive.