The Purchasing Managers’ Index (PMI) survey data from Qatar Financial Centre (QFC) has climbed new heights in November, indicating a rapidly growing non-energy private sector economy.
Since the survey began in 2017, both total activity and new business rose at the strongest rates, while a record rise in backlogged work suggested increasing capacity pressures despite further employment growth. In addition, pricing power improved as average charges for goods and services increased at a series-record pace during last month.
The PMI indices of Qatar 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 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 set a new record high for the third month running at 63.1 in November, up from 62.2 in October. This indicated the strongest overall improvement in non-energy business conditions since the survey began in April 2017. The headline figure has risen for the past six months, a record sequence of month-on-month gains.
The latest growth in the PMI was driven by the new orders and output components, which together have a weight of 55 percent in the headline figure. Both indicators set new record highs during the month, most notably new business, with 54 percent of companies reporting stronger demand growth during November.
In contrast, only 2 percent of firms reported lower new orders during the month compared with October. Growth rates for output and new work have accelerated continuously since June.
“The latest PMI survey results for Qatar have shown the non-energy economy going from strength to strength as we approach a World Cup year. The PMI set a record high for the third month running in November, backed by surging levels of new business and total activity, which is indicative of the strong, gradual economic recovery being witnessed in Qatar. Moreover, the level of outstanding business at companies increased at a record pace during November, despite a faster increase in employment. This bodes well for sustained growth over the coming months.”
Qatari firms remained confident of growth in activity from current levels in 12 months, partly linked to increased tourism and business opportunities due to the forthcoming 2022 FIFA World Cup.
Employment in the non-energy private sector rose for the fourteenth successive month in November, and at a stronger rate. Despite the pick-up in hiring activity, the level of outstanding business increased at the fastest rate on record. This suggested growing pressure from demand on business capacity.
Purchasing activity was stepped up to meet rising demand in November. The volume of inputs bought rose at the second-fastest rate on record, surpassed only by the bounce registered in July 2020. Stocked inputs rose for the sixth month running. Wages and salaries also continued to rise, albeit at a slower rate.
With increasing pressure on costs and rapidly improving demand, non-energy private sector firms raised their charges for goods and services in November. Moreover, the rate of inflation accelerated to a survey record high, signaling an improvement in profitability.
November data covering Qatar’s financial services sector signaled another substantial increase in business activity. The rate of growth eased slightly from October but was the second-fastest since the series began in 2017.
New business inflows at financial services firms rose further in November. Growth was the second strongest ever, with only July 2020 having recorded a faster increase over the survey history. Expectations for activity over the next 12 months remained positive, leading workforces to be expanded further.