The latest Purchasing Managers’ Index™ (PMI™) survey data from Qatar Financial Centre signalled a record improvement in operating conditions in the non-energy economy this September.
Output, new orders and purchasing activity all rose at the second-fastest rates on record, while backlogs accumulated at a faster pace despite a sharper rise in employment. Survey data also indicated the strongest 12-month outlook for nearly a year, amidst growing wage pressures and other immediate capacity concerns.
The Qatar PMI indices are compiled from survey responses from a panel of nearly 400 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 IHS Markit Qatar 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 for the fourth month running to 60.6 in September, from 58.2 in August. The latest figure signalled the strongest overall improvement in operating conditions since the survey began in April 2017, surpassing the previous record high of 59.8 in July 2020. Business conditions have improved for 15 successive months, the longest sequence in the survey’s history.
On a quarterly basis, the PMI averaged 58.2 in the third quarter, the highest on record. The previous quarterly peak was 56.2 in the third quarter of 2020 as the economy rebounded from lockdown.
Sub-sector data signalled marked growth across all four main categories. Manufacturing registered the strongest performance in September, followed by services, wholesale & retail, and construction, respectively.
The headline PMI was positively influenced by four of its five components in September. The 2.4-point upward movement in the PMI since July mainly reflected the new orders (+1.3) and output (+1.1) components, followed by employment (+0.2) and stocks of purchases (+0.2). The suppliers' delivery times component weighed slightly on the headline figure (-0.3) in the latest period.
New business growth accelerated for an unprecedented fourth successive month in September, with the overall pace of expansion almost matching the record high set in July 2020 when the economy rebounded with the unlocking of coronavirus restrictions. New business rose particularly strongly at services firms, followed by manufacturing.
A similar trend was evident for total business activity, growth of which quickened for the fourth month running to the second strongest on record. Meanwhile, the volume of outstanding business rose for the twelfth straight month, and at one of the fastest rates indicated by the survey to date. This occurred despite investment in workforces, with non-energy employment rising at one of the fastest rates in the survey history in September, and the strongest wage inflation since February 2019. Qatari firms were increasingly confident of growth over the next 12 months. Business expectations were the highest since October 2020.
“The recent strength in the PMI strongly indicates that overall economic growth will rebound in the second and third quarters, showing that Qatar’s economy is on the path to strong recovery after facing a relatively challenging period brought about by the COVID-19 pandemic. Qatar’s comprehensive set of measures to ensure that the economy is shielded from the adverse effects of the pandemic continue to contribute to the strength we currently witness.
"Qatar's non-energy private sector economy continued to take off in September, with the PMI ascending to a new all-time high of 60.6 The latest figure signals even stronger growth than that registered during the post-lockdown bounce last July, when the PMI peaked at 59.8.
"Although the rates of expansion in total activity and new business did not quite reach their previous records, they were nonetheless the second-fastest in the survey history, as was the increase in buying activity. The rate of workforce growth was among the strongest registered in four-and-a-half years of data collection, with companies also boosting wages and salaries.”
Sheikha Alanoud bint Hamad Al-Thani,
Deputy CEO & Chief Business Officer, QFC Authority
This recognition is also an acknowledgement of the outstanding business environment in Qatar, and particularly of the QFC.
Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC Authority
I am humbled to represent Qatar as one of this year’s Young Global Leaders and proud to join other members from a diverse mix of nations.
Sheikha Alanoud bint Hamad Al-Thani, Managing Director, QFC
In his virtual address to the QCF community, Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC Authority, said: “Even though we are holding an unusual virtual celebration this year, I believe honouring Qatar and its people today is more worthy than ever. The Qatar National Day 2020 comes amidst the COVID-19 pandemic, which has changed how we interact with one another and ushered in a new normal era to everyday life.”
Al-Jaida added: “However, and against all the odds, we are celebrating another year of our nation’s excellence, strength and economic resilience, which is evidenced in the wise vision and management of Qatar’s leadership, and symbolises an unparalleled model for others to follow. Proudly, Qatar is leading the economic recovery in the region with a promising outlook for 2021, reflected in the positive projections by world renowned organisations such as the International Monetary Fund and the World Bank.”
Michael Ryan, Chief Executive Officer, Qatar Financial Centre Regulatory Authority (QFCRA) said: “This year, Qatar has a lot to celebrate with the country’s collective efforts to curb the spread of the virus, and continued productivity and proactivity in every sector despite the challenges. On National Day, we celebrate Qatar’s history and legacy, but also its achievements and resilience in 2020. To that end, on behalf of the Regulatory Authority, we’d like to thank His Highness Sheikh Tamim Bin Hamad Al Thani, the Amir of Qatar, the country’s leadership, and front-line workers for their hard work in taking every measure to protect the people of Qatar during this unforgettable year.”
Commenting on the occasion, Dr. Khalid Mohammed Al-Horr, CEO, Qatar Finance and Business Academy (QFBA) said: “On this day, I am pleased to convey to the Emir His Highness Sheikh Tamim bin Hamad Al Thani and the citizens and the residents of Qatar my best wishes and warmest congratulations, and as always, we are renewing our vow to continue our march of giving and exerting our efforts to serve our beloved homeland with the needed precautionary measures imposed on us by the current Covid-19 pandemic”
Al-Horr added: “At the Qatar Finance and Business Academy, we will continue to play our role in human capital development and finance education to provide the financial services and the banking sector with the necessary competencies needed to continue the journey for Qatar’s progress and development.”
While wishing everyone in Qatar a happy National Day and acknowledging the Court’s 10-year anniversary, Faisal Al-Sahouti, CEO of QICDRC, commented: “The past decade has seen many achievements for the Court and the country. As we celebrate National Day this year, we are reminded of our community’s unwavering solidarity and collaborative ability to overcome challenges, especially during the COVID-19 pandemic, as well as our joint efforts in achieving the Qatar National Vision 2030. The Court is proud to be a contributor on Qatar’s path to excellence, and we will continue to overcome challenges together to work towards a brighter future for the entire country.”
Commenting on the occasion, IPA Qatar’s CEO Sheikh Ali Alwaleed Al-Thani said: “Despite the challenges imposed by the pandemic, Qatar’s leadership, people, and economy continue to show resilience. This year, the Qatar National Day is an auspicious occasion to reaffirm our values and achievements. As we celebrate this special day, we’re also envisioning an even brighter future with our national, as well as international partners.”
The QFC is an onshore jurisdiction that allows registered companies to enjoy competitive benefits, such as up to 100% foreign ownership, 100% repatriation of profits, 10% corporate tax on locally sourced profits, and an extensive double taxation treaty network with over 80 countries, a legal environment based on English common law and the right to trade in any currency.
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