Qatar business optimism index shows highest level of confidence in over three years
According to the Business Optimism Index, Qatar has reached a three year high in the fourth quarter of 2013. The index reveals that optimism is at a level unsurpassed for 11 quarters.
The optimism in the finance, real estate and business services sector together had reached its highest level in the last three years, and are among the fastest growing business sectors in Qatar, with a combined year-on-year growth of 15.4 percent.
The index for the consolidated non-hydrocarbon sector was 53, up 14 points from Q3 2013 and around 15 points from Q4 2012 levels. The index value in Q4 2013 is the highest recorded reading since Q1 2011, when it touched 61 points. “The sharp increase in optimism shows how strong and resilient the Qatar economy is,” said Yousef M Al Jaida, chief strategic development officer, QFC Authority, “In particular, the finance, real estate and business services sector is maturing rapidly and is a major force behind economic diversification, playing a leading role in supporting the country’s development.”
Other indicators also provide evidence for the strength of Qatar’s economy. The profitability expectations of the finance, real estate & business services sector have risen sharply over the last year (58 points in Q4 2013 from 21 points in Q4 2012). At the same time, nearly 50 percent of small and medium-sized companies surveyed in the sector plan to hire in Q4 of this year.
Other takeaways include a vast majority of respondents - 72 percent of businesses in the non-hydrocarbon sector saying there are no negative factors hindering their development of businesses, this is in comparison to the 58 percent from previous quarters. For the remaining 28 percent, competition and delays in payment and receivables continue to be the key challenges, said Prashant Kumar, associate director, Dun and Bradstreet South Asia Middle East Ltd.
In the manufacturing sector, optimism is at its highest (53, up from 33 in Q4 2012 and 35 in Q3 2013) for three years, driven by a very optimistic outlook for sales and demand, which is the highest among the non-hydrocarbon sectors. Overall the level selling prices had increased steadily from the middle of the year.
The construction sector also has a positive outlook due to expectations of sharp rise in selling prices and profits and the hiring of new employees, reflected by 39 percent saying they plan to invest in business expansion.
The Business Optimism Index is a survey sponsored by the Qatar Financial Centre Authority and conducted by Dun & Bradstreet. You can read the entire report here.