Doha: The latest Purchasing Managers’ Index (PMI) survey data from the Qatar Financial Center (QFC) show record improvements in the non-energy economy’s business conditions in the middle of the second quarter of this year. Production, new orders, purchasing activity, and backlogs have increased at the fastest rate since the survey began in April 2017, but employment has grown at record rates. Strong market conditions supported optimism and improved from April’s lows.

On the price side, inflationary pressures continued to rise, with reported price increases for materials and other inputs. This tendency is not unique to Qatar. The company has chosen to raise sales commissions for the first time in four months.

Qatar’s PMI index is compiled from survey responses from a panel of approximately 450 private companies. The panel covers manufacturing, construction, wholesale, retail and service industries and reflects the structure of the non-energy economy according to official national accounts data.

The headline Qatar Financial Center PMI is a complex single-digit indicator of the performance of the non-energy private sector. This is derived from indicators of new orders, production volumes, employment, supplier deadlines, and purchased inventory.

PMI rose significantly from its previous peak of 63.6 in April to a record high of 67.5 in May. This shows that the overall improvement in business conditions in Qatar’s non-energy sector has been the strongest since the study began more than five years ago.

The record increase in new orders supported the strongest production expansion in the five-year history of the study. There were also mentions of more tourism activities, the upcoming FIFA World Cup, the withdrawal of pandemic restrictions, and shorter lead times.

Manufacturers recorded a significant increase in production, followed by service, wholesale and retail, and construction, respectively.

The sustained expansion of demand has led to further capacity pressures on Qatar’s non-energy companies. In fact, good businesses have risen at the fastest pace in series history, accelerating from their previous peak in April. The company sought to curb the increasing backlog by increasing staff at record speeds.

Higher production requirements have led companies to increase purchasing activity at survey record rates. Meanwhile, purchase inventory rose at the fourth highest pace in the history of the series.

The company was confident that workloads would increase in the next 12 months and sentiment would improve in May. Expectations for the upcoming FIFA World Cup and more tourism activities have given optimism. Emotions by sub-sector were the strongest among service providers.

Finally, price pressures continued to rise in the middle of the second quarter of this year, with average overall input costs rising in each of the last decades. In fact, inflation has been the strongest since August 2020. In response, the company raised its selling price for the first time in four months.

The latest PMI data on Qatar’s financial services sector shows that business activity has improved even more sharply with the record rise in new businesses in May.

As a result, corporate confidence has improved to the highest level in three months. Supporting demand conditions have led companies to increase their workforce during the month.

Currently, personnel have been increasing continuously over the past nine months, with the latest expansion being the strongest since October 2021.

The increase in personnel, along with the increase in general costs, led to a modest but steady increase in overall input prices. However, output charge inflation accelerated, making it the fifth fastest in series history.

Yousuf Mohamed Al Jaida, Chief Executive Officer of QFC Authority, said: Record increases in production, new orders, purchasing activity, and backlog were reported, while employment levels rose at near record rates. ”

“Companies were also optimistic that strong demand conditions would continue as they approached the long-awaited FIFA World Cup. Meanwhile, the increase in backlog clears open orders that companies have accumulated, especially last year or so. We are actively working to support a sustained increase in production throughout the summer, “he said.

Al Jaida said: However, while inflationary pressures continued to rise, companies took advantage of favorable market conditions and raised selling prices to protect profit margins.

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