The outlook for Qatar’s economy remains overwhelmingly positive, despite sluggish and uneven global growth, according to the Business Optimism Index (BOI) released by Dun and Bradstreet and sponsored by the Qatar Financial Centre (QFC) Authority. As a result, the Qatari business community, particularly Small and Medium-Sized Enterprises (SMEs), continue to remain highly optimistic moving into the fourth quarter of 2014.
The composite BOI for Qatar’s Non-Hydrocarbon sector rose to 49, a 26 percent quarter-on-quarter (q-o-q) 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.
Commenting on the overall results, Yousuf Al-Jaida, Deputy Chief Executive Officer 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.” He stated: “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-Hydrocarbon 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 Q4 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 indicates 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 Hydrocarbon sector also produced encouraging results. The composite BOI for the Hydrocarbon sector has increased 900 percent this year q-o-q, to reach a value of 10 in Q4 up from 1 in Q3. 74 percent of firms continue to foresee market stability with respect to selling prices.
The BOI for Net Profits in the Hydrocarbon sector showed a marked increase of 388 percent this year q-o-q, scoring a 23 in Q4, up from -8 in Q3. One third of all Hydrocarbon 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 Hydrocarbon and Non-Hydrocarbon sectors, 48 and 47 percent respectively, said they do not anticipate hindrances to business operations throughout Q4. Although Hydrocarbon 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. Business expansion plans for the Hydrocarbon sector have strengthened, with 28 percent of the firms expecting to invest in expanding operations in Q4 compared to 24 percent in Q3. In contrast, a higher percentage of firms in the Non-Hydrocarbon sector (38 percent) plan to invest in business expansion in Q4 (similar to the last quarter).
Overall, SMEs are more optimistic about the Qatari business environment than the large local companies . 49 percent of SMEs indicated that they do not anticipate any significant disruptions to their operations in Q4, while the corresponding number is smaller for the large companies (38 percent).
Responding to the overwhelmingly positive outlook for business in Qatar, Sheikh Mohammed bin Faisal bin Qassim Al-Thani, Board Member of the Qatar Businessmen Association, said: “The final BOI report for this year shows that optimism prevails in Qatar, with a majority of businesses confident of embarking upon new projects as the country continues its bold and progressive journey towards the realisation of our National Vision. As the latest trends clearly indicate, we are on the right path, and I sincerely hope that this pattern will continue in the coming quarters.”
When asked to comment about the results, Prashant Kumar, Associate Director of Dun and Bradstreet reiterated that optimism is increasing among the Qatari business community. “Qatar's economy in Q4 continues to remain highly resilient even in the face of uneven global growth and increased competition for investment,” he said. “It's really a testament to the long range strategic thinking of Qatar's policy makers and the drive for excellence to prevail among the Qatari people,” he added.
About the Qatar Financial Centre
Established in 2005, the Qatar Financial Centre (QFC) is an onshore centre that provides a platform for domestic, regional and international growth. It consists of the QFC Authority, the QFC Regulatory Authority, the Civil and Commercial Court (First Instance and Appellate Divisions) and the Regulatory Tribunal.
The QFC Authority is the commercial and strategic arm of the QFC. It develops and ensures compliance with QFC regulations, administers key QFC office functions and deals with applications from non-regulated organisations.
Follow the QFC Authority on Twitter: @QFCAuthority
If you have anything you want to share with us, send us an e-mail at [email protected]!
Want to send a tip? Drop us an e-mail at [email protected], anonymity is guaranteed!
You have successfully registered your account!Please confirm your e-mail address by clicking on the URL sent to you.The e-mail usually arrives in 5-10 minutes.
How ajeeb was that!? Thanks for contributing to our community! Your post will appear after we take a quick look!