The non-energy private sector in Qatar witnessed a notable upswing in May 2024, according to the latest Purchasing Managers’ Index (PMI) survey data from the Qatar Financial Centre (QFC), compiled by S&P Global.
Output and new orders increased at the fastest rates since Q3 2023, companies continued to expand employment, and the 12-month outlook improved.
Inflationary pressures remained muted, with input prices broadly unchanged and only modest increases in output charges since April.
Headline PMI highlights strengthening business conditions
The Qatar PMI is compiled from survey responses of around 450 private sector companies, covering manufacturing, construction, wholesale, retail, and services sectors, reflecting the structure of the non-energy economy.
The headline Qatar Financial Centre PMI, a composite indicator of non-energy private sector performance, rose to 53.6 in May, up from 52.0 in April. This marked the strongest improvement in business conditions since last September, and exceeded the long-run trend level of 52.3 since April 2017. The 1.6-point increase in the PMI was one of the largest over the past two years, signaling growing demand momentum in the non-energy economy.
Accelerating new business and output
New business expanded at the sharpest rate in eight months, with companies citing their reputations for high-quality products and services as attracting new clients. This acceleration in new business generated the fastest growth in total business activity since last August, with all four broad sectors posting quicker expansions, led by wholesale & retail and services.
Despite the increase in new work, companies were still able to reduce outstanding work during the month.
Confidence regarding the next 12 months also strengthened in May, linked to development plans, marketing campaigns, and the introduction of new high-quality products and services, according to the survey.
Employment growth supports expansion
Faster growth of output and new orders was reflected in increased employment, as companies hired to support their development goals and deliver high-quality services with experienced staff in new technologies. Input price pressures were broadly stable, with average purchase prices declining to offset higher wages. Prices charged for goods and services increased at a slower rate than the previous hike in March.
Financial services sector remains a bright spot
The financial services sector recorded much faster growth in May, with the Business Activity and New Business Indexes reaching 12- and 8-month highs, respectively. Companies were also increasingly optimistic about the 12-month outlook, and employment growth was maintained for the fourteenth successive month.
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