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How Kuwait + Qatar + Lebanon’s PMI performed in July: Purchasing Manager Indices (PMI) tracking the non-energy sectors in Qatar and Kuwait have recorded expansion due to robust demand, new orders, and output. Over in Lebanon, security concerns continue to push down business performance, yet rays of optimism broke through as the pace of private sector decline eased in July.
REFRESHER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.
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First up, Kuwait: Kuwait’s PMI recorded modest improvement in business conditions in July as new orders, output, and purchasing activity all grew at a faster rate compared to the month prior, according to Kuwait’s S&P Global PMI (pdf). The country’s headline number remained almost unchanged at 51.5 in July, down from 51.6 in June.
New orders continued to rise at a steady pace, despite the growth rate slowing to a 10-month low, with businesses citing competitive pricing and advertising as key drivers. New export orders spiked at the quickest pace on record, spurred by new orders from neighboring countries. Stock purchases grew in July, in line with a rise in new orders, boosting inventories. Delivery times were also reduced, further supporting purchasing activity.
Inflation eased and input costs increased for the fourth month: Inflation has fallen to its lowest point YTD, while purchase prices and staff cost inflation grew at a record pace.
Employment remained steady: Employment rates stayed unchanged overall, as businesses noted challenges in sourcing “suitably skilled workers,” the report says. Staff shortages resulted in a growing backlog of work that has reached 18 months.
Sentiment remained optimistic in Kuwait + Qatar: Kuwait’s outlook remained strong in July, with firms expressing confidence that output will continue to expand over the coming year. Businesses are looking to streamline methods to boost employment growth in response to their rising order books.
Meanwhile in Qatar: Qatar’s non-energy private sector signaled strong growth as boosts to new orders, output, and purchasing buoyed the index, according to Qatar Financial Center’s PMI (pdf). Qatar’s headline number dipped to 51.3 in July, falling from a 23-month high of 55.9 recorded in June.
New orders increased at a steady pace, with businesses attributing the rise to firm reputations, customer trust, and high-quality products and services, the report says. Output subsequently climbed upwards in July. Backlogs also dropped at the quickest rate since January last year as a result of improved productivity, regardless of new order intake.
Purchasing activity is up: Purchasing activity rose for a fifth consecutive month. Employment rates dropped marginally in July, compared to last month. Staff costs fell, while purchase prices grew, balancing out cost pressures and leaving the costs of products mainly unchanged.
Moving over to Lebanon: Lebanon’s private sector economy diminished further in July, weighed down by a downturn in new orders and outputs due to escalating geopolitical tensions and growing security concerns, according to Blominvest Bank’s Lebanon PMI (pdf). July’s reading saw a slight improvement in its headline figure moving up to 48.3 from 47.8 in June, signally a softer rate of decline.
Drops in new orders hindered output: New orders fell in July and new exports dropped for the eighth consecutive month, yet overall order contractions eased for the first time in three months on the back of an “influx of tourists and expats somewhat stimulating new business,” Blom Chief Economist Ali Bolbol said.
Business activity decreased at large amid weakened demand, causing purchasing activity to dip. Employment rates fell at the quickest pace in a year-and-a-half. Input costs grew in July, with firms noting higher shipping costs and increased prices for imported items.
The silver lining: The pace of contraction settled at its lowest pace since April and delivery times improved in July. Inflation rates also slowed to a marginal pace.
Sentiment remained optimistic all round: Kuwait’s non-oil outlook remained strong in July, with firms reporting positive output forecasts for the next 12 months. Similarly, in Qatar, business confidence was at a high, with new location openings and the integration of advanced technology, investment, and marketing set to boost the economy in the next year.
Lebanon’s private sector expects business activity to recover due to the rise in PMI in July, with a “renewed sense of optimism and resilience” for the next 12 months despite ongoing difficulties.
