Qatar’s non-energy business sector experienced a notable surge in activity in February, outpacing the previous month’s performance, according to the latest data from the Qatar Financial Center (QFC). The Purchasing Managers’ Index (PMI), a key indicator of economic health, climbed to 51.0 in February from 50.4 in January. This growth reflects a robust expansion in business conditions. Moreover, it signifies a promising trajectory for Qatar’s economic diversification efforts, buoyed by enhanced business expectations and rising employment levels.
Accelerated growth
Of the five components on the index, output, new orders and employment in Qatar’s non-energy sector all registered above 50.0 index readings in February. This indicates a month-on-month expansion. “Although new orders did not rise by as much as in January, the 12-month outlook brightened with firms at their most confident since last September,” stated Yousuf Mohamed Al-Jaida, CEO of QFC Authority.
However, a decrease in purchasing activity indicated a preference for destocking, as inventories continued to decline slightly for the third consecutive month. This reflects the firms efforts to achieve efficiency gains in Qatar’s non-energy business sector. Meanwhile, price pressures remained low, as average input costs increased only slightly, while charges decreased at the most significant rate seen in two years.
Rising demand
Demand for goods and services in Qatar’s non-energy sector continued to expand in February. Companies widely linked new orders to new customers and branch openings. The rate of growth eased compared to January which allowed a reduction in the volume of outstanding business. Meanwhile, total activity in Qatar’s non-energy sector increased at the fastest rate in three months in February, although growth remained below the strong average for 2023.
Amidst these dynamics, companies expressed growing optimism regarding future growth prospects, citing robust business development plans, expanding client bases, and strategic marketing initiatives.
Read: Qatar’s 2023 budget records surplus of $11.84 billion
Increase in employment
Firms in Qatar’s non-energy sector continued to raise employment, extending the current sequence of growth to 12 months. “Companies are taking on staff at the fastest rate in five months, with financial services registering the strongest job creation. The sector also posted faster new business expansion in February, bucking the wider trend,” Al-Jaida added.
However, purchases of inputs fell further as firms continued to trim inventories. This further alleviated pressure on supply chains, as lead times shortened for the 22nd successive month. In addition, average input prices rose in February, driven by both wages and purchase costs. However, overall cost pressures were muted. On the other hand, output prices fell for the fourth month in a row, and the most since February 2022.
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