Doha's non-energy private sector witnessed a stronger improvement in business conditions in February, according to the Qatar Financial Centre's purchasing managers index (PMI).
Output and employment both increased at faster rates, and new business growth was maintained. Companies were also able to make progress on volumes of outstanding work during the month, and the 12-month outlook improved, said the PMI survey data, compiled by S&P Global.
A reduction in purchasing activity revealed a preference for destocking, with inventories falling slightly for the third month running as firms sought efficiency gains. Price pressures remained subdued, with average input costs rising only modestly and charges falling at the strongest rate in two years.
The PMI registered 51 in February, up from 50.4 in January. The latest figure moved further above the no-change mark of 50; thereby signalling a faster improvement in 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 entities. 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.
"So far in 2024 the headline index is trending in line with the average for the fourth quarter of 2023, indicating sustained economic growth. Although new orders did not rise by as much as in January, the 12-month outlook brightened with firms at their most confident since last September," said Yousuf Mohamed al-Jaida, chief executive officer of the QFC Authority.
Of the five components of the headline figure, output, new orders and employment all registered above 50 index readings in February, indicative of month-on-month expansions. These were partly offset by shorter suppliers' delivery times and a reduction in input stocks.
Demand for goods and services in Qatar's non-energy economy continued to expand in February, it said, adding companies widely linked new orders to new customers and branch openings.
"The rate of growth eased since January, enabling a reduction in the volume of outstanding business," it said.
Total activity increased at the fastest rate in three months in February, although growth remained below the strong average for 2023.
Qatari firms continued to raise employment, extending the current sequence of growth to 12 months. Purchases of inputs fell further, however, as firms continued to trim inventories. This further alleviated pressure on supply chains, as lead times shortened for the twenty-second successive month.
Average input prices rose in February, driven by both wages and purchase costs, but overall cost pressures were muted. Output prices fell for the fourth straight month, and the most since February 2022.
Qatari financial services companies saw faster growth in volumes of total business activity and new contracts in February. The seasonally adjusted Financial Services Business Activity and New Business Indexes posted 51.3 and 51.4 respectively, in each case rising since January. Companies were also more optimistic regarding the 12-month outlook for activity.
"Companies are taking on staff at the fastest rate in five months, with financial services registering the strongest job creation. The sector also posted faster new business expansion in February, bucking the wider trend,” al-Jaida said.
Yousuf Mohamed al-Jaida, chief executive officer of the QFC Authority.
