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Qatar saw rapid growth in business activity in December, with business conditions in the non-oil private sector coming close to stabilising as the FIFA World Cup drew to a close.
The country’s Purchasing Managers’ Index (PMI) for the month reached 49.6, up from 48.8 in November, coming close to the threshold for business activity growth, which is 50.0.
“As was the case in November, wholesale, retail and service providers in particular registered rapid expansions in activity,” the Qatar Financial Centre (QFC) Aurthority report said.
“These sectors also drove a record overall increase in prices charged for goods and services. Furthermore, the 12-month outlook for business activity strengthened further to the highest since July 2020.”
Qatar’s index score rose for the second month in a row, pointing to a near-stabilisation in overall non-energy private sector business conditions at the end of 2022, QFC Authority said.
The index for the country’s output reached 62.8 as retail and the service industry surged during the World Cup, but it was countered by a construction-driven pause in new work, as well as improving supply chains.
Output rose for the 30th consecutive month and was well above the long-running average, and firms reduced their outstanding business for the fifth month running.
Costs
The data also showed a further slight fall in average input prices but a record rate of charge inflation, pointing to improving profitability.
Charges rose especially sharply in the wholesale and retail and services sectors, linked to tourism demand from World Cup. Efforts to control costs were also in evidence as workforces and purchasing were trimmed further.
Companies widely reported that they expect a positive legacy from the World Cup, with a number of new projects lined up and a permanent boost to tourism. Output expectations for the next 12 months were the strongest in over two years, the report said.
Financial services activity accelerated further, expanding at its fastest rate for four months, with charges levied rising for the first time in six months.
Employment also rose at the fastest pace since July.
“The FIFA World Cup Qatar 2022 makes its mark on the Qatari economy in December, with another rapid increase in business activity fueled by the retail and services sectors,” said Yousuf Mohamed Al-Jaida, CEO of QFC Authority.
“The tournament's legacy is also looking secure, with widespread reports from companies of post-competition business opportunities and an expected permanent boost to tourism. The Future Activity Index, tracking the 12-month outlook, rose to a 29-month high in December,” he added.
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
