Economy

Qatar’s private sector activity slows after World Cup boost

February 6, 2023, 10:02 AM

Qatari companies are reporting new business opportunities arising from the World Cup, the PMI found

Business activity in Qatar’s private sector cooled in January after its World Cup bounce.

The first Purchasing Managers’ Index (PMI) survey for 2023 posted a correction to 45.7 in January, from 49.6 in December, as activity and new work slowed following the tournament, which ran from November 20 to December 18 last year.

It was the lowest score for 31 months. However, the 12-month business outlook hit its highest level in three years.

Yousuf Mohamed Al Jaida, CEO of Qatar Financial Centre Authority, said: “Although January saw moderations in current levels of activity and new business, these should be viewed in the context of a very strong 2022, the best calendar year so far during the survey’s six-year history.”

He added that the financial services industry in Qatar was experiencing a “significant boost in growth and expansion”, with activity increasing for the past 19 months.

Confidence is also strong outside financial services, Al Jaida said. The future output index, which tracks non-energy private sector companies’ expectations for business activity over the next 12 months, rose to 74.9, the highest level since January 2020. The monthly gain in the index was the second largest on record, he added.

“These positive indicators, along with the rise in the employment index, reflect a strong degree of optimism as companies reported new business opportunities arising from the World Cup.”

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.

Although overall levels of activity were lower in January, this was the first correction since a run of strong gains in every month during the previous two-and-a-half years.

The drop in the headline PMI figure was cushioned by a record one-month rise of 4.1 points in the employment index, the third-largest component with a 20 percent weight.

Overall labour market conditions were the best in six months and headcount rose in the services and wholesale and retail sectors.

At the start of 2023, the rate of completion in outstanding work matched the fastest registered over the past three-and-a-half years, following a two-year period of strong backlog growth in the lead-up to the Fifa tournament.

Input costs rose at the fastest rate in seven months in January, while output prices were discounted for the first time since last April.