Doha, Qatar: 3 September 2024 – The latest Purchasing Managers’ Index™ (PMI^®) survey data from Qatar Financial Centre (QFC) compiled by S&P Global signalled an all-round improvement in business conditions in Qatar's non-energy private sector in August. Demand for goods and services strengthened, driving a near-record increase in employment and another solid expansion in output. Firms continued to deplete outstanding business, and average wages rose at the fastest rate on record. Overall cost pressures were the highest in four years, while charges for goods and services fell slightly. Finally, the 12-month outlook improved notably.

The Qatar PMI indices are compiled from survey responses from a panel of around 450 private sector companies. The panel covers the manufacturing, construction, wholesale, retail, and services sectors, and reflects the structure of the non-energy economy according to official national accounts data.

The headline Qatar Financial Centre PMI is a composite single-figure indicator of non-energy private sector performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

The PMI rose to 53.1 in August, from 51.3 in July, signalling a stronger overall improvement in business conditions in the non-energy private sector economy. It was also above the long-run trend level of 52.3 (since April 2017).

The employment component provided the largest boost to August’s headline figure. Private sector jobs in Qatar rose strongly in August, reversing July's slight decline. The workforce growth rate was the second-fastest on record, just shy of the peak set in January 2019.

The boost to jobs was accompanied by record wage pressures during the month, as the seasonally adjusted Staff Costs Index rose to a new high of 55.7. Non-staff cost pressures also intensified in August, with purchase price inflation at a 15-month high. Overall input price inflation hit a four-year high. In contrast, prices charged for goods and services fell in the latest period.

Recruitment was influenced by a strengthening demand for Qatari non-energy goods and services. The level of incoming new orders expanded for the eighteenth time in 19 months, and at a strong rate that outperformed the long-run survey trend.

The faster increase in new business in August supported another robust expansion in total activity. Output has risen continuously for over four years except for two brief pauses in January and December last year. While accepting new contracts, companies continued to reduce the volume of outstanding orders, albeit at the slowest rate in the current seven-month sequence of backlog depletion.

Confidence regarding the next 12 months strengthened notably in August, to the highest since March 2023. Positive sales forecasts were linked to government economic development policies, tourism, a rising expatriate population, construction and real estate projects, and Qatar's attractiveness to international investors.

New project starts meant that demand for inputs rose in August, as purchasing activity increased for the sixth successive month. Despite this, suppliers’ lead times improved to the greatest extent since December 2022. Input stocks declined for the sixth time in 2024 so far and at the fastest rate since November 2022.

QFC Qatar PMI vs. GDP

Fastest rise in new business for two years

• Demand for financial services accelerates in August
• Sharpest increase in employment for five years
• Year-ahead outlook improves 

Qatari financial companies recorded booming demand for their services in August. The seasonally adjusted Financial Services New Business Index rose sharply to 62.9, from 57.2 in July, signalling a rapid improvement in demand conditions with the fastest growth since August 2022. This led to a faster rise in total activity (58.6).

Companies were also increasingly optimistic regarding the 12-month outlook, with sentiment at the highest level since May 2023. There was also a notable boost to employment growth, which was the strongest in five years (56.4).

In terms of prices, average charges set by financial services companies fell for the first time in four months. Meanwhile, average input prices rose the most since July 2020.

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