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How Qatar and Lebanon’s non-oil private sector performed in January: Purchasing manager indices (PMI) tracking non-energy sectors in Qatar and Lebanon both saw improvements, with growing demand fuelling markets in Qatar improving outlook. Lebanon, although still in contraction, moved closer to stabilization on the back of slower inflation and softer rates of decline in new orders and output.
Qatar’s non-energy private sector in January saw improved business conditions,according to Qatar Financial Center PMI (pdf).The headline number tracked at 50.4 in January — slightly above the 50.0 threshold separating contraction from growth — up from 49.8 in December. Output, new business, and backlogs of work all drove the reading higher, showing monthly growth. The higher readings were partly offset by a decline in firms’ input stocks.
Qatari firms saw boosted demand in January: Demand conditions grew in January — building on 2023’s robust growth — with bolstered sales attributed to new customers, marketing campaigns, competitive pricing, and tourism brought in by the AFC Asian Cup. New orders boosted total activity at a slower rate than the 2023 average, partly explaining the rise in backlogs. The two-time surge in backlogs over the past three months indicate pressures on operating capacity. Qatari firms also employed more, extending growths in jobs to an 11-month streak.
Purchases of inputs fell, as firms reported sufficiency and made do with existing stocks, but input stocks fell at their fastest since November 2022, alleviating pressure on supply chains and shortening lead times for the twenty-first consecutive month.
Prices also fell across the board: Input prices fell in January on the back of wages and purchase costs, with output prices continuing to fall for the third month.
Lebanon’s PMI moved closer to stabilization, inching up to 49.4 in January from December’s eleven month low of 48.4 pushing it closer to the 50.0 threshold, according to BlomInvest Banks’ PMI (pdf). Steady employment levels and softer declines in output and new orders buoyed the figure, and input cost inflation also slowed. Stability in the exchange rate contributed to the index’ improvement, Blominvest Bank General Manager Fadi Osseiran said in the report.
Business activity fell at a milder and softer pace seen at the end of 2023,with respondents citing restrictions due to the local political and economic scene. Limited spillover from the Hamas-Israel conflict, so-far confined to the country’s south, also reassured surveyists, Osseiran added.
Concerns related to the neighboring war did curb demand, especially in tourism: The month saw a downtick in sales and firms took on less new work, with uncertainty cutting demand, the report said. Exports and tourism were particularly hard hit, but the overall fall in demand was moderate with the respective index maintaining above long-term averages.
The silver lining: Employment was steady in January, despite the fact that backlogs of work fell for the fourth straight month. Operating costs also showed greater stability for the month, with inflation in input costs marginal and at their slowest in about two and a half years. Charged prices did increase however, indicating that firms sought to boost their margins, the report said.
While Qatar’s outlook remains positive, Lebanon’s outlook is more uncertain:Qatar’s rise in demand contributed to a brighter 12-month outlook than at the end of 2023, according to QFC’s PMI. Firms in Lebanon cited local and regional uncertainty as hindrances to growth in the coming year, and although January’s sentiment was subdued, it was significantly better than that observed over the previous four years.
ICYMI- The UAE and Saudi Arabia’s non-oil private sectors saw slower expansion in January, with UAE’s headline figure inching down to 56.6 and KSA’s activity improving at its slowest rate in two years dipping down to 55.4. Egypt’s PMI dropped slightly to 48.1 in January from 48.5 the previous month.
