Money position: The World Cup increases positive prospects for business

Money position: The World Cup increases positive prospects for business

Qatar Financial Center

The latest data from the Qatar Financial Center’s Purchasing Managers’ Index study pointed to rapid growth in commercial activity in November 2022, coinciding with the start of the FIFA World Cup Qatar 2022™ in the second half of November 2022. Wholesale, retail and services sectors recorded rapid growth activities. commercial. Sales prices of goods and services also rose to record levels, with high tourist demand contributing to the growth of hotel prices, rents, flights and other services. The results of the study for the month of November 2022 also showed that Qatari companies’ expectations for commercial activity over the coming year were the most positive since October 2020 as they sought to capitalize on business opportunities following the conclusion of the FIFA World Cup Qatar 2022™.

Qatar PMIs are compiled from survey responses received from a panel of approximately 450 private sector companies. This board covers several areas, including manufacturing, construction, retail and wholesale, as well as services, and reflects the structure of the non-energy economy, according to official national accounts data.

The QFC Core Purchasing Managers’ Index is a single-digit composite indicator of the performance of non-energy private sector companies in Qatar. The headline PMI for Qatar is calculated based on new orders, production, employment, supplier lead times and procurement inventories.

First time

The Purchasing Managers’ Index rose for the first time in six months, from 48.4 points in October 2022 to 48.8 points in November 2022, indicating stability in the overall commercial activity of non-energy private sector companies in Qatar. Looking at the five components of the main PMI, the manufacturing index rose to 63.0 points thanks to growth in business activity and demand in the retail and services sectors, while the new orders index fell due to contracting jobs in the construction sector. Supplier lead times have improved and Qatari companies have reduced their inventories of manufacturing inputs to save costs.

Qatar’s private sector non-energy company production index rose for the twenty-ninth consecutive month in November 2022, recording the fastest growth rate since July 2022 and much higher than the study’s long-term average. Detailed data from the four sectors indicated significant growth in the wholesale, retail and service sectors, reflecting the positive impact of the FIFA World Cup Qatar 2022™.

New sale

New sales continued to fall in November 2022, especially in the construction sector, where growth in overall business activity is associated with the resolution of backlogs. The outstanding work was completed at the fastest pace since July 2019.

The outlook for business activity over the next 12 months improved further in November 2022 as Qatari companies look to capitalize on business opportunities following the conclusion of the FIFA World Cup Qatar 2022™. The overall level of confidence was the highest since October 2020, with construction and service companies the most optimistic.

Prices of goods and services rose for the seventh consecutive month and at the highest rate in the study’s history in November 2022, partly reflecting the improvement in the pricing power of Qatari firms associated with the FIFA World Cup Qatar 2022™, particularly in the wholesale, retail and services sectors . Meanwhile, average input prices fell slightly for the first time in four months, reflecting lower staff costs and broadly stable procurement prices.

Purchasing activity eased again in November 2022 as companies reported adequate inventory levels. Input inventories fell at a faster pace for the fourth month in a row as Qatari companies sought to increase efficiency and supplier performance continued to improve, with average delivery times the shortest since September 2020. Staff numbers also decreased, particularly in the construction sector.

Fast growth

Commenting on the results, Mr. Yousef Mohamed Al Jaidah, Chief Executive Officer of the Qatar Financial Center Authority, said: “November 2022 witnessed rapid growth in commercial activity in non-energy private sector companies in Qatar with the start of the FIFA World Cup. Qatar 2022™, and it is not surprising that this growth is attributed to the wholesale, retail and service sectors, which during November 2022 recorded a significant increase in the selling prices of goods and services, and the inflation rate of production prices was the highest in the history of the study.

Overall, private sector non-energy companies in Qatar presented a positive outlook for more than two years as they look to capitalize on business opportunities following the FIFA World Cup Qatar 2022™. The new orders index rose for the first time since its record high in May 2022, while new sales fell slightly in November 2022. Similarly, the employment index rose in November 2022 despite a decline in employment due to a slowdown in the construction sector.

Delivery dates to suppliers were more favorable in November 2022, allowing Qatari companies to reduce inventory levels and improve efficiency. This is a positive indicator of improving companies’ ability to set prices and increase their profits.”