Qatar’s non-oil private sector has maintained its growth trajectory into October. The Purchasing Managers’ Index (PMI), a vital instrument of sector performance, has remained in positive territory. The October PMI reached 50.8, thanks to Qatar’s improving business conditions.
Analyzing the PMI
The PMI serves as a single-figure indicator, reflecting the health of the non-oil sector. It encompasses various factors such as new orders, output, employment, suppliers’ delivery times, and stocks of purchases.
Although a slight decrease from September was recorded, the overall growth has been maintained since February. Total business activity among Qatari non-energy sector firms rose further in October, with firms often reporting higher customer numbers.
Meanwhile, output has risen every month since July 2020, with the exception of January 2023. That is due to the conclusion of the FIFA World Cup Qatar 2022. The overall rate of expansion was the weakest in 2023 so far. However, construction continued to post a solid rebound in activity.
Optimistic outlook amid slight slowdown
Yousuf Mohamed Al-Jaida, CEO of Qatar Financial Centre (QFC), expressed optimism despite the reduced growth pace. Key indicators like output, new orders, and employment marked increases in October. Meanwhile, companies remain hopeful about the 12-month outlook.
Additionally, activity and new business in Qatar’s private sector have been on a nine-month growth streak. A notable increase in demand at wholesalers and retailers was witnessed this month. That is due to the steady increase in the number of businesses in the country. Although the pace of expansion has slightly eased compared to September, overall growth continues.
Additionally, the non-oil private sector in Qatar saw employment expand for the eighth consecutive month. That is largely driven by recruitment in construction firms and manufacturing. Thus, these sectors also hold the most robust 12-month outlooks.
Read: Non-oil sector drives the UAE’s 3.7 percent economic growth
Improved profitability and strong financial sector
Since February, companies in the non-oil sector have gradually increased the prices of goods and services. This enhanced the sector’s profitability. Interestingly, input prices have fallen for the first time in ten months, leading to improved profit margins.
Meanwhile, Qatar’s financial services sector remains a standout performer, with further growth in activity and new contracts. The sector posted strong indices of 58.3 and 55.0 for activity and new contracts, respectively.
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