Doha's non-energy private sector opened 2024 on a stronger note with improved business conditions as output volumes and new businesses were higher against the December 2023 levels, reflecting the positive momentum brought about by the ongoing AFC Asian Cup, according to the Qatar Financial Centre (QFC).
All four price indicators - overall input prices, staff costs, purchase prices and output prices - declined and supply chains continued to improve and financial services showed signs of cooling with "stable" levels of both activity and new work, according to the latest Purchasing Managers’ Index (PMI) survey data from the QFC.
“The first batch of PMI data for 2024 signalled improving business conditions for the Qatari non-energy firms, following a solid economic expansion in 2023," said Yousuf Mohamed al-Jaida, chief executive officer of QFC Authority.
Of the five components of the headline figure, output, new orders and employment all registered above 50.0 index readings in January, indicative of month-on-month expansions. These were partly offset by shorter suppliers' delivery times and a reduction in input stocks at non-energy private sector firms.
The headline QFC 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 registered 50.4 in January, up from 49.8 in December. The latest figure was above the no-change mark of 50.0 and thereby signalled improving business conditions in the non-energy private sector economy.
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.
Demand conditions in Qatar's non-energy economy grew in the first month of 2024, building on solid growth on average across 2023, the QFC said.
"Firms that reported greater sales cited new customers, promotional campaigns, competitive pricing and tourism related to the AFC Asian Cup. The renewed rise in demand contributed to a brighter 12-month outlook than at the end of 2023," the survey results said.
"Demand was strong enough to generate an increase in outstanding business, only the second occurrence of rising backlogs over the past year-and-a-half," al-Jaida said.
Qatari firms continued to raise employment, extending the current sequence of growth to 11 months, the findings said, adding purchases of inputs fell for the first time over the same period, however, as firms reported sufficient inventory levels.
Input stocks fell the most since November 2022. This further alleviated pressure on supply chains, as lead times shortened for the twenty-first successive month, it said.
The PMI said average input prices fell in January, driven by both wages and purchase costs. Output prices fell for the third straight month, and the most since last June.
Highlighting that Qatari financial services companies recorded broadly stable volumes of total business activity and new contracts in January; it said the seasonally adjusted financial services business activity and new business indexes posted 50.1 and 50.2 respectively, signalling broadly no change since December.
In terms of prices, average charges set by financial services companies fell for the first time in four months, while cost inflation in the sector eased further.
Yousuf Mohamed al-Jaida, chief executive officer of QFC Authority.
