Doha, Qatar: 16 May 2022 – The latest Purchasing Managers’ Index™ (PMI™) survey data from Qatar Financial Centre (QFC) signalled a record improvement in business conditions in the non-energy economy at the start of the second quarter. Output rose at the fastest rate since the series began in April 2017, while new orders expanded at the third-quickest rate in the series history. Activity growth was especially strong in the construction sector. That said, despite buoyant market conditions and relatively weak rates of inflation, positive sentiment dipped to a new series low in April.
The Qatar PMI indices are compiled from survey responses from a panel of around 450 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.
The headline Qatar Financial Centre 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.
The PMI increased to a new record high of 63.6 in April, up from 61.8 in March. This indicated the strongest overall improvement in non-energy sector business conditions since the survey began just over five-years ago.
Central to the upsurge was a record uplift in output, which has now expanded over the last 22 months. All four monitored sectors recorded substantial rates of output growth in April with construction leading the uptick. Manufacturing, services and wholesale & retail followed behind, respectively.
Similarly, new orders rose at a marked and accelerated pace in April. The rate of growth was the quickest since last November, and the third-strongest in the series history.
The record increase in output prompted firms to raise their purchasing activity during the month. Purchases rose at the second-strongest rate in the series, surpassed only by that seen in July 2020. Wholesale & retail firms recorded a particularly steep increase in purchases. Meanwhile, stocks of purchases rose fractionally indicating healthy real-time demand from customers.
These strong demand conditions added to capacity pressures at the start of the second quarter with incomplete work rising for the nineteenth month in succession. In fact, backlogs rose at a survey-record rate with firms in the manufacturing and service sector recording sharp increases in work-in hand. Despite rising backlogs, employment levels rose only marginally, and at the softest pace in three months.
Firms remained optimistic about output growth over the next 12 months. That said, sentiment dipped to a new series low in April.
Price pressures continued to build at the start of the quarter, with average input costs rising for the ninth month in succession. However, firms held back on passing on higher expenses and instead chose to reduce their selling prices. Promotional activity and discounting have now been seen in each of the last three months.
QFC Qatar PMI™ vs. GDP
Financial sector expands at record rate in April
The latest PMI data on Qatar's financial services sector signalled a record improvement in output, underpinned by robust demand conditions.
In response to strong demand for financial services, companies in the sector boosted workforces at the start of the second quarter. The rate of increase was broadly in line with that seen in March and quicker than the long-run series average. At the same time, financial services companies remained optimistic regarding growth prospects over the next 12 months, though the degree of positivity dipped to a nine-month low.
On the price front, overall input price inflation quickened to a 21-month high and was the sixth-strongest in the series history. Selling prices rose for the second month in succession, but the rate of increase was only marginal.
The second quarter of 2022 saw a record improvement in business conditions in Qatar's non-energy sector. Output expanded at the strongest rate in the series' five-year history as demand conditions were more than favourable. At the same time, firms continued purchasing activity to fulfil their new orders and added to their headcounts.
Record uplifts in backlogs should sustain output growth in the coming months as firms continue to work through their work in hand.
Qatar's non-energy private sector once again registered a strong performance, which has particularly been the case over the last eleven months."
Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC Authority