DOHA: The outlook for Qatar’s economy remains “overwhelmingly positive”, despite sluggish and uneven global growth, according to the latest Business Optimism Index (BOI) released by Dun and Bradstreet and supported by the Qatar Financial Centre (QFC) Authority.
As a result, the Qatari business community, particularly small and mid-sized enterprises (SMEs), continue to remain highly optimistic moving into the fourth quarter of 2014.
The composite BOI for Qatar’s non-hydrocarbons sector rose to 49, a 26 percent quarter-on-quarter increase, with a high degree of positivity focused on the construction sector, driven by a large number of new projects and tenders. Additional optimism has been prompted by a growing clientele base, expansion plans, sales figures, and profitability.
Yousuf Al Jaida, Deputy CEO of the QFC Authority, said: “This quarter’s survey further demonstrates Qatar’s positive business environment,” adding that, “optimism among our business community remains high.” “We expect to see this translated into increased interest in Qatar from international firms as well as a continued increase in Qatari entities establishing companies in the QFC.”
Giving the non-hydrocarbons sector a substantial boost, construction is currently viewed as the most optimistic sector for Q4. Globally, a growing confidence is fuelled in part by increased urbanisation, consumer spending, and credit availability, while both the ambitious Qatar National Vision 2030 and preparations for the 2022 FIFA World Cup are driving enthusiasm nationally.
The BOI for the construction sector rose to 53, up 11 points from 42 in Q3, with government spending, steadily increasing population, high per capita income, GDP growth, and prudent policy preferences contributing towards the positive outlook.
The survey also indicated additional overall optimism in the finance, real estate and business services sectors, due to promising expectations for sales volumes, selling prices, new orders, profits, and number of employees. In fact, 67 percent of those surveyed expect an increase in sales volumes while 68 percent anticipate an increase on new orders. Expansion plans also remain generally robust, with 35 percent - a marginal decrease from last quarter — expressing intent to expand current business.
The hydrocarbons sector also produced encouraging results. The composite BOI for the hydrocarbons sector has increased nine-fold (900 percent) this year quarter-on-quarter, to reach a value of 10 in Q4 up from 1 in Q3. Some 74 percent of firms continued to foresee market stability with respect to selling prices.
The BOI for net profits in the hydrocarbons sector showed a marked increase of 388 percent this year quarter-on-quarter, scoring a 23 in Q4, up from minus 8 in Q3. One third of all hydrocarbons firms expect their profits to increase due to higher selling prices and larger sales volumes. 59 percent indicated that they did not anticipate any change in sales volume.
Almost half of all respondents in both the hydrocarbons and non-hydrocarbons sectors, 48 and 47 percent, respectively, said they do not anticipate hindrances to business operations throughout Q4. Although hydrocarbons firms cited competition, lack of new projects, and delayed payments as key concerns moving forward, growth continues to be a significant motivator for both sectors.
The Peninsula
