Doha, Qatar: 5 February 2023 – The first batch of Purchasing Managers’ Index™ (PMI™) survey data from Qatar Financial Centre (QFC) for 2023 indicated a cooling of business activity in January following the conclusion of the FIFA World Cup Qatar 2022™ tournament, but the 12-month business outlook soared to the highest in three years. Data by sector signalled ongoing growth in services, particularly financial services. There was also a relative improvement in the jobs market as the respective employment index posted its largest ever one-month gain to reach a six-month high.

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 posted a correction to 45.7 in January, from 49.6 in December, indicating a moderation in overall business conditions as activity and new work cooled following the FIFA World Cup Qatar 2022™ tournament. The latest reading was the lowest in 31 months but should be viewed in the context of a stellar 2022 calendar year when the PMI trended at 57.7, the highest annual average sine the survey began in April 2017.

Forward-looking data continued to highlight improving prospects for the non-energy private sector in January. The Future Output Index rose for the sixth month running to a three-year high of 74.9, indicating a strong degree of optimism as companies reported new business opportunities arising from the FIFA World Cup Qatar 2022™. Moreover, the month-on-month rise in the Index was the second largest on record. Sentiment improved across all four sub-sectors and was especially strong in manufacturing.

Although overall levels of activity were lower over the month in January, this was the first correction since a run of strong gains in every month during the previous two-and-a-half years. Sector data also signalled resilience at service providers at the start of 2023.

The drop in the headline PMI figure was cushioned by a record one-month rise of 4.1 points in the employment index, the third-largest component with a 20% weight. Overall labour market conditions were the best in six months, and headcounts rose in the services and wholesale & retail sectors.

The start of 2023 saw the rate of completion in outstanding work match the fastest registered over the past three-and-a-half years, following a two-year period of strong backlog growth in the lead-up to the FIFA World Cup Qatar 2022™.

Regarding prices, input costs rose at the fastest rate in seven months in January, whereas output prices were discounted for the first time since last April.

QFC Qatar PMI™ vs. GDP

Strongest outlook for financial services in over three years

• Financial Services Future Activity Index surges to 41-month high
• Current activity continues to rise sharply
• Strongest rise in employment since October 2021

The financial services sector in Qatar continued to expand at a marked rate in January and the 12-month outlook strengthened noticeably. Activity increased for the nineteenth successive month, and at a rapid pace, while expectations for activity surged to the highest since August 2019.

New business grew for the thirty-second consecutive month in January, and at the fastest rate since last August. Meanwhile, financial services firms expanded their headcounts at the sharpest rate in 15 months.

January data indicated a jump in costs at financial services providers, with the Input Prices Index rising to a seven-month high and above its long-run average. Charges levied rose for the second month running following a five-month sequence of discounting.

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