Qatar’s non-oil private sector growth accelerated in June, according to the latest Purchasing Managers’ Index (PMI) survey data from the Qatar Financial Centre (QFC) compiled by S&P Global.
Fastest output growth in over a year
Output increased at the fastest rate in a year and a half, as new business growth accelerated. Companies continued to expand employment and the 12-month outlook remained strong. Inflationary pressures were muted, with input prices rising only slightly since May and prices charged for goods and services falling.
Headline PMI signals strongest improvement in nearly two years
The headline Qatar Financial Centre PMI reached 55.9 in June, up from 53.6 in May, signaling the strongest improvement in business conditions in the non-oil private sector since July 2022. It was also above the long-run trend level of 52.3 (since April 2017). The headline figure has risen five times so far in 2024, and the 2.3-point increase was among the largest registered over the past three years.
Stronger demand drives output growth
The faster increase in new business in June resulted in the strongest growth in total business activity since December 2022. Growth accelerated notably in manufacturing and construction, and remained sharp in other sectors. Despite rising demand, companies were able to further reduce the volume of outstanding work.
Positive outlook for the next 12 months
Confidence regarding the next 12 months remained strong in June. Companies linked positive forecasts to new branch openings, new customers and marketing campaigns.
Employment growth continues
Faster growth of output and new orders was reflected in another increase in employment, the sixteenth in a row. Companies reported new job opportunities due to business growth and the need to recruit highly skilled staff.
Muted inflationary pressures
Cost pressures rose slightly in June as average purchase prices and staff costs increased, albeit at marginal rates. Prices charged for goods and services fell for the sixth time in the past eight months, as firms made discounts to boost competitiveness and win new customers.
Read more: Qatar’s non-oil private sector posts robust growth with 53.6 PMI in May
Strengthening growth in financial services
Qatari financial services companies recorded a further strengthening in growth of total business activity and new contracts in June. Companies were also increasingly optimistic regarding the 12-month outlook, with sentiment the highest since July 2023.
The acceleration in business expansion has not been accompanied by rising price pressures. On the contrary, companies engaged in discounting in June to further boost sales.
For more economy news, click here.
