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Business Optimism Index—Qatar, 2014 Q3

Dun & Bradstreet, sponsored by the Qatar Financial Centre Authority

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Key Highlights

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  • Optimism remains firm. The composite BOI for Qatar’s Non-hydrocarbon sector for Q3, 2014 stands at 39, the same as for Q3, 2013. It is, however, lower by 8 points as compared to Q2, 2014. The decline in optimism is primarily attributed to the summer seasonal downturn and the expected slowdown in business activity during the holy month of Ramadan.

  • The composite BOI for the Hydrocarbon sector has been steadily declining since Q4, 2013 and now stands at 1 due to lower optimism on all the constituent parameters of the index. This is in line with the projected contraction in GDP from the Hydrocarbon sector during 2014 (as per IMF forecasts, Qatar’s real GDP from the Hydrocarbon sector is estimated to contract by 1% during 2014).

  • In the Non-hydrocarbon sector, the index for the Finance, Real Estate and Business Services sector is sharply down, largely for seasonal reasons. But within it, finance and insurance firms continue to have a stronger outlook than the Real Estate and Business Services components. Overall, 61% of firms expect an increase in sales, 64% expect an increase in orders and 40% expect to invest in business expansion in Q3, 2014.

  • The Manufacturing sector displays the strongest optimism for Q3 2014, backed by demand emerging from new projects as well as an overall strong economy and a rising population. At 46, the BOI is 11 points higher than in the same period of 2013.

  • The Trade & Hospitality sector shows the weakest forecast for the third quarter. While the trading sub-sector continues to post a strong outlook, the Hospitality sub-sector has displayed a significant drop in optimism levels mainly due to the summer seasonal downturn and the expected slowdown during Ramadan.

  • 44% of the firms in the Hydro-carbon sector and 51% of the Non-hydrocarbon sector firms indicated that they do not anticipate any hindrances to their business operations during Q3, 2014.

  • Competition is the leading concern across all the businesses; government regulations are the second most adverse obstacle for the Non-hydrocarbon sector, while availability of skilled labor and delay in payments are key concerns for the Hydrocarbon sector.

  • Qatari businesses have modestly scaled back their outlook for investment in business expansion; 24% of Hydrocarbon firms and 38% of Non-hydrocarbon firms plan to invest in business expansion in Q3 versus corresponding proportions of 31% and 41% firms in Q2.

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