Qatari Businesses Beyond Oil Experience Surge in Activity

Qatar's non-energy sector is experiencing its strongest growth in almost two years, according to the latest Purchasing Managers' Index (PMI) data. This positive trend signifies a period of economic buoyancy for the nation, moving beyond its reliance on the traditional powerhouse of the oil and gas industry.

The PMI, a key indicator of business health, registered 51. 5 in November 2023, surpassing the previous month's figure of 50. 8. This uptick marks the first acceleration in growth since July 2023 and extends a ten-month streak of improvement in business conditions for Qatar's non-energy private sector firms.

Yousuf Mohamed Al-Jaida, CEO of the QFC Authority, expressed optimism regarding the rising PMI. "The increase in the headline PMI is positive news, indicating a faster pace of expansion in both new business and output, " he remarked. Financial services, in particular, were highlighted as a bright spot within the economic landscape.

While growth hasn't reached the heights observed during the lead-up to the FIFA World Cup in 2022, the PMI for 2023 currently sits at 52. 6, exceeding the nation's long-term trend of 52. 3. This indicates a period of sustained economic expansion, albeit at a slightly more moderate pace compared to the exceptional circumstances surrounding the World Cup.

The report further highlights an acceleration in output and new business growth compared to October 2023. Notably, the rise in new business was significant enough to generate a backlog for the first time in over a year, despite continued growth in employment.

Qatar's PMI indices are compiled by S&P Global and derived from survey responses from a panel of roughly 450 private sector companies. The November 2023 report indicates continued progress in supply chains, with lead times for materials exhibiting a reduction for the nineteenth consecutive month. This streamlining of procurement processes has allowed firms to address their rising backlogs more effectively.

The positive PMI data aligns with Qatar's broader economic goals of diversifying its revenue streams and fostering a robust non-energy sector. This economic diversification strategy aims to lessen the nation's dependence on hydrocarbons and position it for sustainable growth in the years to come.

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