Qatar’s non-oil private sector sees fastest growth in a year

Growth in Qatar’s non-oil private sector accelerated in June, according to the latest data from the Purchasing Managers’ Index (PMI) survey conducted by the Qatar Financial Centre (QFC) and compiled by S&P Global.

Fastest production growth in over a year

Output rose at the fastest pace in a year and a half as new business growth accelerated. Firms continued to add staff, and the 12-month outlook remained strong. Inflationary pressures were muted, with input prices rising only slightly since May, while prices charged for goods and services fell.

Headline PMI signals strongest improvement in almost two years

The Qatar Financial Centre’s headline PMI came in at 55.9 in June, up from 53.6 in May, signalling the strongest improvement in private sector business conditions outside oil since July 2022. It was also above the long-term trend level of 52.3 (since April 2017). The headline indicator has risen five-fold so far in 2024, with the 2.3-point increase being one of the strongest on record in three years.

Stronger demand drives production growth

Faster growth in new business in June resulted in the strongest increase in total business activity since December 2022. Growth accelerated particularly in manufacturing and construction, while remaining strong in other sectors. Despite rising demand, companies were able to further reduce the backlog of work.

Positive outlook for the next 12 months

Confidence for the next 12 months remained strong in June, with companies attributing positive forecasts to new branch openings, new customers and marketing campaigns.

Employment growth continues

Faster growth in production and new orders was reflected in another increase in employment, the 16th in a row. Companies reported new job opportunities due to increased business and the need to recruit highly skilled personnel.

Muted inflationary pressures

Cost pressures increased slightly in June as average purchase prices and employee costs rose, albeit marginally. Prices charged for goods and services fell for the sixth time in eight months as companies introduced discounts to increase competitiveness and attract new customers.

Read more: Qatar’s non-oil private sector posts solid growth with 53.6 PMI in May

Strengthening growth in financial services

Qatari financial services firms reported further strengthening in growth in total business activity and new business in June. Firms were also increasingly optimistic about the 12-month outlook, with sentiment at its highest since July 2023.

The acceleration of business expansion was not associated with increased price pressure. On the contrary, companies used discounts in June to further increase sales.

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