Non-energy growth accelerates further in May

5 Jun 2023

PMI by S&P Global

Doha, Qatar: 5 June 2023 – The latest batch of Purchasing Managers’ Index™ (PMI™) survey data from Qatar Financial Centre (QFC) indicated a further build-up of growth momentum in the non-energy private sector economy. Growth rates for output, new orders, employment and purchasing all accelerated since April, and the 12-month outlook improved.

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 rose for the sixth time in seven months to 55.6 in May, from 54.4 in April, indicating the strongest improvement in business conditions since July 2022. The latest figure moved further above the long-run trend of 52.3.

The PMI figure was mainly boosted by the output and new orders components in May, while employment and stocks of purchases also had positive overall contributions.

New business increased at the fastest rate in ten months in May. Companies reported signing new contracts with both existing and new customers, alongside new product offerings and tourism demand. New business in financial services was also a strong point in the latest findings.

Total business activity rose further in May. Output has risen every month for almost three years straight, except for a brief correction in January following the conclusion of the FIFA World Cup Qatar 2022™. The rate of expansion in May was the strongest of 2023 so far and well above the six-year survey trend.

The 12-month outlook for the non-energy private sector improved in May. The Future Output Index rose for the first time in three months to 59.2, with confidence strengthening in the services, wholesale & retail and construction sectors.

Non-oil private sector employment rose to the greatest degree since July 2022, helping firms to further reduce their levels of outstanding business in May. Demand for inputs strengthened, but supply chains coped admirably as average lead times were cut again.

May data signalled that non-staff cost pressures rose, with average purchase prices increasing at the fastest rate since June 2021. Staff costs increased only marginally and at the slowest rate in the current four-month sequence. Overall input price inflation rose to an 11-month high. In contrast, prices charged for goods and services were broadly unchanged since April.


Sharpest rise in new business in nine months

  • Financial Services New Business Index rises to 61.8
  • Growth of total financial services activity also accelerates
  • Charges rise, boosting margins


May data signalled a strong month for financial services companies in Qatar. Rates of expansion in new business and total activity both accelerated since April, and the 12-month outlook strengthened.

New work increased, extending the current growth sequence to three years. Moreover, the rate of growth in May was the fastest since August 2022 and well above the long-run trend. Total financial services activity rose for the twenty-third month running and at the strongest rate in three months. Meanwhile, expectations for activity strengthened and financial services firms raised employment.

May data signalled improving margins at financial services firms, as charges were raised further but input costs were broadly flat on average.

Qatar's non-energy private sector remained on an upward growth trajectory in May, as inflows of new business accelerated in part due to tourism and demand for financial services. The sub-indices for output (59.6) and new orders (60.1) boosted the headline PMI to a ten-month high of 55.6, well above the long-run trend level since 2017 of 52.3.

Financial services continued to outperform the wider economy, with its key indices for activity and new business registering 61.4 and 61.8, respectively. Financial services firms also raised their charges, in contrast to little change across the non-energy sector as a whole."

The latest data suggests that rising demand for inputs is being reflected in prices, with the rate of purchase price inflation rising to its highest for nearly two years. Supply chains were able to cope with greater demand, as lead times on inputs fell further during the month
Yousuf Mohamed Al-Jaida

Yousuf Mohamed Al-Jaida

Chief Executive Officer, QFC Authority

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