9 February 2015: Qatar’s private sector remains highly optimistic about the country’s economic prospects in the first quarter of 2015 thanks to a flurry of new projects and expectations of rising consumer demand, a recent business survey shows.
According to the Business Optimism Index (BOI) released by Dun and Bradstreet and sponsored by the Qatar Financial Centre (QFC) Authority, confidence in Qatar’s Trade and Hospitality sector has risen to its highest level since 2009.
The BOI for the Trade and Hospitality sector increased to 57 in Q1, 2015 amid expectations of higher tourist inflows to Doha during upcoming major business and sporting events in the wake of the nation’s success in hosting the 2015 Handball World Championship.
More than 2.8 million tourists visited Qatar in 2014, an 8% increase compared to 2013, according to figures released this week by the Qatar Tourism Authority.
Deputy Chief Executive Officer of the QFC Authority Yousuf Al-Jaida said sustained optimism among Qatar’s private sector is an indication of the country’s positive business environment.
“Both international and local firms seeking to tap into Qatar’s fast growing economy can benefit from unrivalled incentives by establishing a presence in the QFC,” he said.
Hamad Abdulla Al-Mulla, Chief Executive Officer and Board Member of Katara Hospitality, the leading Qatari-based global developer of prestigious hotels and leisure facilities, expressed confidence in the prospects for sustained growth in the Hospitality sector.
“2014 marked a year of accomplishments for Katara Hospitality and, as a QFC-registered company, we are well positioned to benefit from high tourism inflows in 2015 with several new hotel openings,” said Al-Mulla.
The positive outlook for the Hospitality sector and the strongest optimism level since 2011 in the Finance, Real estate and Business Services sector pushed the composite Non-Hydrocarbon BOI up by 4 points on a quarter on quarter (q-o-q) basis.
In terms of selling prices, SMEs were more optimistic than large companies, anticipating a higher volume of sales, new orders and net profits, during the next quarter.
Prashant Kumar, Associate Director, Reseach and Advisory Services at Dun and Bradstreet, said, “Optimism among Qatar’s business community indicates the success of the government in laying the foundations of a thriving private sector.
"The results of the BOI are a testament to the resilience of the Qatari economy at a time when significant downside economic pressures are building in many oil-producing countries,” he added.
Businesses in the Hydrocarbon sector have also maintained a positive outlook despite the slump in oil prices. The Hydrocarbon BOI has strengthened on a q-o-q basis by 5 points, mainly owing to a strong outlook on profitability and hiring.
Respondents in both the Hydrocarbon and non-Hydrocarbon segments have expressed increased optimism in relation to the overall business environment. 22% of respondents in the Hydrocarbon sector and 23% of Non-Hydrocarbon businesses stated that they did not expect any obstacles to impact their operations during Q1, 2015 compared to a corresponding 48% and 47% respectively in the previous quarter.
Concerns over increased competition, however, seem to have gained momentum over the previous quarters, with 38% of respondents in the Hydrocarbon sector and 39% of respondents within the Non-Hydrocarbon sector citing intensifying competition as a major challenge.
The fall in crude prices posed the second biggest challenge for the Hydrocarbon sector, with 12% of respondents expecting an adverse impact on their business.
Against a backdrop of plummeting oil prices, businesses in the hydrocarbon industry appeared to be more cautious in terms of committing investment in capital expansion plans. Firms in the Non-Hydrocarbon sector, on the other hand, have held a firm and steady outlook in terms of capital expansion plans.
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
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