Qatar's non-energy private sector saw further expansion in August, according to the latest Purchasing Managers’ Index (PMI) survey data from Qatar Financial Center (QFC), thanks to the growth of output, new orders, employment, and purchases.
The PMI posted 53.9 in August, little changed from 54 in July, yet indicating improvement in business conditions. It also remained above the average for the first half of 2023 (52.5) and the long-run trend since 2017 (52.3).
New business grew in August, with the expansion rate easing further from May’s peak but remaining well above the long-run survey average. Meanwhile, new orders at manufacturing and financial services businesses increased during the month.
Output has expanded every month for more than three years, except for a brief correction in January following the end of the FIFA World Cup Qatar 2022.
Purchases also increased for the sixth consecutive month in August. Supply chains continued to improve as average lead times fell for the sixteenth successive month, despite higher demand for inputs.
Cost pressures were in line with the long-run average last month, but staff costs rose the most since February. Output prices fell modestly for the fourth straight month.
Non-oil private sector employment expanded for the sixth consecutive month in August, while recruitment was again strong at service providers.
Qatar's non-oil revenue stood at $7.7 billion (QAR 28.2 billion) in the second quarter of 2023, a 2.2% year-on-year rise, thanks to the realization of a major portion of the budgeted non-oil revenue in the quarter due to corporate income tax collection timing.
This helped the Gulf nation to post a budget surplus of $2.75 billion (QAR 10 billion) in the second quarter of 2023 despite a decline in overall revenue and higher expenditure.
The second-quarter revenue stood at $18.8 billion (QAR 68.4 billion), marking a 20.2% year-on-year decline. Meanwhile, the expenditures totaled $16.04 billion (QAR 58.4 billion), indicating a year-on-year rise of 12.1%.
In March, rating agency Fitch affirmed Qatar's Long-Term Foreign-Currency Issuer Default Rating at 'AA-' while revising the outlook to positive from stable, Moody's also upgraded Qatar's credit outlook to positive from stable late last year while affirming its rating at 'Aa3.'
The 12-month outlook for the non-energy private sector was optimistic in August, with manufacturers being the most optimistic, followed by wholesalers and retailers.
