Qatar’s economy is progressing ahead swiftly, helped by strong momentum in economic activities. Qatar Financial Centre’s (QFC) latest Purchasing Managers’ Index (PMI) survey of Qatari non-hydrocarbon private sector businesses, released last week, has highlighted a marked increase in the volume of new business.
The rate of expansion was the fastest since August 2018, and sharper than the trend pace indicated since the survey began in April 2017. The latest findings also show output expectations were the second-strongest on record; with the fastest input price inflation in a year.
The PMI survey is compiled for the Qatar Financial Centre by IHS Markit, and has been conducted since April 2017. The report provides an early indication of operating conditions in Qatar. The headline figure derived from the survey is the Purchasing Managers’ Index, readings of which above 50 signals an improvement in business conditions on the previous month, while readings below 50 show a tightening.
Over the first quarter of 2019 Qatar’s PMI has trended higher compared with the final quarter of 2018; a period during which the global economy saw the softest expansion in two years.
The uptick in business activity helped lift the headline PMI figure for Qatar from February’s 48.5 to 50.1 in March. This improvement was reflected in new orders, higher output, lower stocks of purchases and suppliers’ tighter delivery times.
Earlier, strong increase in employment had driven Qatar PMI higher in January. At 50.5 in January, up from 50.1 in December, the latest Qatar Financial Centre PMI indicated a solid improvement in overall business conditions across the non-oil & gas private sector. Driving the latest improvement was a series-record increase in employment, while both short-term output and new business measures ebbed slightly. Businesses remained strongly confident regarding expected activity at the start of 2019.
The stand-out figure from the latest survey was a sharp rise in employment. Companies in the non-hydrocarbon private sector increased headcounts at the strongest rate since the survey began in April 2017. Companies have increased staff levels substantially in preparation of launching new manufacturing, retail, and other broad non-oil activities.
Qatar Government has budgeted 1.7 percent year-on-year higher expenditure in 2019. Of its QR207bn planned expenditure, QR48bn is related to project roll-out or 23 percent of total spending. Qatar has been spending heavily over the past few years on infrastructure and some projects are nearing completion leading to tapering of the spending plan. Increased spending for infrastructure will boost economic activity in the country.
