(MENAFN- Gulf Times)
Non-oil private sector in Qatar gained momentum with output rising markedly in September, according to latest Purchasing Managers' Index (PMI) survey data from Qatar Financial Centre (QFC).
Although new orders fell for the first time in 27 months and back-to-back contractions were seen in employment and inventories, it said the fast-approaching FIFA World Cup supported optimism with sentiment improving to a 12-month high.
'Qatar's non-oil economy continued to grow in September, rounding off another solid quarterly performance. There were, however, divergences in latest data with a sharp and substantial increase in output contrasting with a renewed fall in demand. Anecdotal evidence suggested clients were placing orders on hold in preparation of the World Cup while Qatari businesses were at the same time increasing output in anticipation of greater demand,' Yousuf Mohamed al-Jaida, chief executive officer, QFC Authority, said.
Looking ahead, the FIFA World Cup continued to underpin optimism with firms hopeful that greater tourist activity in the coming months would support output growth. In fact, sentiment improved the highest for a year, according to the report.
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.
The headline Qatar Financial Centre 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.
At 50.7 in September, down from 53.7 in August, the latest PMI pointed to a softer improvement in business conditions in Qatar's non-energy sector. Central to the moderation was a renewed decline in new orders. The fall was broad-based with all monitored sectors registering lower sales, led by construction. Panel comments indicated that client projects were placed on hold due to the upcoming World Cup.
Despite weaker demand, firms sought to boost their output in September. Business activity increased for the twenty-seventh month running with the latest uptick marked. Moreover, the rate of output growth was quicker than the long-run series average amid expectations of greater activity in the coming months.
Firms continued purchasing inputs at the end of the quarter, albeit at a softer pace. Inventory holdings meanwhile fell fractionally.
On the price front, a fall in purchase costs contrasted with higher wage expenses, leading to only a marginal increase in overall input prices. Meanwhile, firms sought to boost profits by hiking their selling prices at a near-record rate.
Finding that the overall input price inflation rose only marginally, and at a pace that was below than the long-run series average, it said despite this, firms hiked their selling prices at the second-quickest rate in the survey's history with comments indicating a greater emphasis on their profit margins.
The latest PMI data on Qatar's financial services sector signalled further marked improvement in September. Business activity increased sharply, but the rate of growth eased slightly from August. New orders, meanwhile, rose only slightly, and at the softest pace for 15 months.
On the price front, overall input prices fell, albeit only fractionally. Meanwhile, selling prices rose only slightly. Businesses remained optimistic of activity growth in the year-ahead with sentiment firmly in positive territory, despite easing notably from that seen in August.
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