Stable business conditions in the non-energy sector in December

7 Jan 2024

PMI by S&P Global

Doha, Qatar: 7 January 2024 – Qatar's non-energy private sector registered broadly stable business conditions in the last month of 2023, according to the latest Purchasing Managers’ Index™ (PMI®) survey data from Qatar Financial Centre (QFC). Volumes of output, new business and backlogs of work were all largely stable compared with November levels, while employment growth was maintained, and the 12-month business outlook remained positive. Financial services remained a key source of growth at the end of the year. Price pressures were still subdued, and supply chains continued to improve.

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 registered 49.8 in December, from 51.5 in November. The latest figure was close to the no-change mark of 50.0 and thereby signalled broadly stable business conditions in the non-energy private sector economy. Across 2023 as a whole the PMI trended at 52.4, mainly in line with the solid long-run average since 2017 (52.3).

Of the five components of the headline figure, output, new orders and stocks of purchases all registered similar index readings, indicative of stable volumes compared with November. A positive contribution from employment was offset by shorter suppliers' times.

Demand for goods and services in Qatar's non-energy economy was mostly stable in the final month of 2023, completing a year of solid overall growth on average. Firms reported new customers during the month. By sector, manufacturing continued to see comparatively strong new business, as did financial services.

Similar to new orders, total activity was broadly unchanged in December since the previous month. Again, financial services remained a source of growth. Meanwhile, the overall level of outstanding business remained stable in December.

Qatari firms continued to raise employment in December, extending the current sequence of growth that began in March. Purchases of inputs also rose, albeit only slightly, while suppliers' delivery times shortened.

Average input prices rose slightly in December, driven mainly by wages and salaries as purchase prices fell. Output prices declined marginally again. Finally, Qatari firms ended 2023 with positive expectations for activity in 2024, although overall confidence was softer than the long-run survey trend.

QFC Qatar PMI vs. GDP


Financial services continues to expand in December

  • Growth of activity and new business remain faster than wider economy
  • Financial services employment continues to increase
  • Fastest rise in charges for financial services since April

Qatari financial services companies recorded further increases in total business activity and new contracts in December. The seasonally adjusted Financial Services Business Activity Index posted 51.6, still comfortably above the overall private sector figure of 49.6 albeit the lowest in over two years.

The weaker increase in total activity reflected the slowest increase in new business since September 2022. That said, demand was solid overall and more robust than the non-energy sector average, and the 12-month outlook for activity remained positive. Meanwhile, employment at financial services firms rose for the ninth month running.

In terms of prices, average charges set by financial services companies rose to the greatest degree since April, while cost inflation in the sector eased.

The final PMI data for 2023 signalled stable business conditions for Qatari non-energy firms, completing a year of solid economic expansion. Survey data for the second half of the year suggest that annual growth in official GDP will have been maintained.

Financial services continued to expand in December, and manufacturing also registered rising demand. The overall level of employment rose for the tenth month running and wages continued to increase, which should support consumer demand in the coming months.

The business outlook for the year ahead remains positive, although unsurprisingly optimism has softened somewhat compared with the peak seen in the aftermath of the World Cup.
Yousuf Mohamed Al-Jaida

Yousuf Mohamed Al-Jaida

Chief Executive Officer, QFC Authority

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