The latest data of the Purchasing Managers’ Index study issued by the Qatar Financial Center revealed continued growth in the activity of private sector companies not related to energy in Qatar in the middle of 2023.
Growth rates in the indicators of production, new orders, employment and purchasing activities were high and the outlook for business activity for the next twelve months remained positive. Backlogs decreased thanks to improved supply chains.
Mr. Youssef Mohamed Al-Jaida, CEO of the Qatar Financial Center Authority, confirmed that although the PMI declined to 53.8 points in June 2023, the index recorded a stronger performance in the second quarter at 54.6 points, compared to the first three months of 2023.
He added that the growth rates of the indicators of commercial activity and new orders remained high and much higher than the average of the study that began six years ago, and Qatari companies attributed this again to the recovery of the tourism sector, competitive prices and the implementation of new marketing activities.
Al-Jaida explained that the financial services sector continued to grow sharply, with its two main indicators: commercial activity and new business recording 60.0 points and 63.4 points, respectively, and the demand for financial services increased for the third month in a row, as the financial services sector remained one of the leading sectors.
Al-Jaidah added, “Despite the continued high cost prices faced by Qatari companies, they were able to reduce the prices of their goods and services to achieve new sales and retain key customers.”
The PMIs for Qatar are compiled from responses to survey questions received from a panel of approximately 450 private sector companies. This committee covers several areas including manufacturing, construction, retail and wholesale as well as services, and it reflects the structure of the non-energy economy, according to official national accounts data.
The QFC Core Purchasing Managers’ Index is a single-digit composite indicator of the performance of non-energy private sector companies in Qatar. The headline PMI for Qatar is calculated on the basis of new orders, production, employment, suppliers’ delivery times and inventories of purchases.
The PMI decreased from 55.6 points in May to 53.8 points in June 2023, indicating an improvement in the business activity of non-energy private sector companies in Qatar. The PMI averaged 54.6 points during the second quarter of 2023, which is the best performance of the index since the third quarter of 2022 (when the index averaged 55.3 points), and that period witnessed the preparations for the organization of the FIFA World Cup Qatar 2022™. The latest PMI reading remained above the long-term index’s level of 52.3.
The PMI reading in June 2023 relied mainly on the production and new orders indices, while the employment and purchasing activities indices had positive contributions.
New orders witnessed strong growth in June 2023. Qatari companies linked the increase in new orders to the recovery of the tourism sector, competitive prices, increased marketing activities, and a good reputation of the business sector among customers. The rate of growth in new orders decreased in June compared to May 2023 but was among the fastest recorded over the past year. The growth rate of new orders in the financial services sector accelerated to its highest level in ten months.
Total commercial activity recorded new growth in June 2023, and the production index increased to complete its series of monthly growth in more than three years, with the exception of the decline recorded after the conclusion of the FIFA World Cup Qatar 2022™. Although the growth rate of commercial activity declined compared to May 2023, it was the second highest recorded in 2023 so far and much higher than the average of the study that began six years ago.
The expectations of private sector companies not related to energy in Qatar for the next twelve months remained positive, and this is related to the implementation of new projects, company development plans and marketing campaigns. Most companies from various sectors presented positive forecasts for commercial activity for the next twelve months, especially the manufacturing and services sectors.
Non-energy private sector companies intensified recruitment activities in June 2023, which helped reduce the amount of unfinished business. The suppliers’ delivery times continued to improve despite the high demand for production requirements again, and the suppliers’ performance improved to its highest level since the beginning of 2023 until now.
Input prices increased in June 2023, in line with the trend observed from the beginning of 2023 to date. The rate of inflation of output prices remained slightly above the long-run average of the study. In contrast, selling prices of goods and services fell for the fourth time in six months, and at their fastest pace since February 2022.
financial services
Financial services firms in Qatar continued to register significant growth in mid-2023. The rate of new business growth in the financial services sector picked up in June 2023, leading to another rapid rise in overall activity. Financial services firms’ outlook on business activity over the next 12 months remained positive as firms intensified their purchasing activities.
New business rose in June, completing its current growth chain for more than three years. The business growth rate in June 2023 was the highest since August 2022 and well above the study’s long-term average. Overall activity in financial services firms rose for the 24th consecutive month, and at a relatively strong pace. Meanwhile, the outlook for business activity over the next 12 months remained positive and financial services firms ramped up recruitment activities.
June 2023 data indicated a reduction in the prices of financial services for the first time in seven months, and this was accompanied by a decline in the prices of production inputs.
