DOHA: Continuing the run of growth seen since August last year, the latest headline QFC Qatar PMI remained in expansion territory during June and indicated a moderate improvement in business conditions.
Price discounting and promotional activity continued to stimulate client demand, which in turn led to higher output requirements across the non-hydrocarbon sector. Furthermore, job creation was the joint-fastest amid strong business confidence.
The survey, compiled for Qatar Financial Centre by IHS Markit, has been conducted since April 2017 and provides an early indication of operating conditions in Qatar. The headline figure derived from the survey is the Purchasing Managers’ Index (PMI).
Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The headline seasonally adjusted Qatar Financial Centre PMI – a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil and gas private sector – fell to 51.8 in June, from 52.4 in May. Easing output and new order growth partly contributed to the lower headline PMI figure in June. Nevertheless, the latest figure was indicative of a moderate expansion, and one that was stronger than the survey’s average.
The volume of new business has increased continuously since October 2017. Many firms noted that promotional activity stimulated client demand, reflected by the sharpest reduction in selling prices since the survey began.
Responding to improving business conditions, firms increased their payroll numbers for the second month running. Moreover, the rate of growth accelerated to a joint-record high. Despite higher workforce numbers, backlogs of work continued to build-up in June. Firms linked rising levels of work outstanding to solid inflows of new business.
Output growth in the non-hydrocarbon private sector was modest overall and below that seen in the preceding survey period. That said, the expansion was in line with the historical average, with the latest improvement extending the current phase of growth to nine months.
Average cost burdens faced by firms fell for the first time in the survey’s history during June. The reduction in operating costs was only marginal overall, however.
Amid strong positivity towards future growth prospects, stocks of purchases increased at a survey-record pace as firms prepared for an anticipated upturn in growth.
Meanwhile, supplier delivery times improved for the first time since April last year, thereby signalling softening capacity pressures in Qatar’s non-oil and gas private sector in June.
“Qatar’s non-hydrocarbon sector activity remains positive thanks to continuing expansion in new orders and output growth, according to QFC Qatar PMI a gauge for business conditions. PMI data along with other current performance indicators demonstrates Qatar’s solid economic performance in the first half of the year”, commented Sheikha Alanoud bint Hamad Al Thani, Managing Director, Business Development, QFC Authority.
