Qatar Business Optimism Index Q3 2010 Presented by Presented by Dun & Bradstreet Dun & Bradstreet Qatar Financial Centre (QFC) Authority Qatar Financial Centre (QFC) Authority
Dec 14, 2015
Qatar Business Optimism Index Q3 2010
Presented by Presented by Dun & BradstreetDun & BradstreetQatar Financial Centre (QFC) Authority Qatar Financial Centre (QFC) Authority
• The D&B Business Optimism Index is recognized world over as an
indicator which ascertains the pulse of the business community
• Provides insight into the short-term outlook of business units on
key business parameters including sales, profits, pricing,
headcount and investment
• Provides analysis of major trends and issues concerning the
business community
Business Optimism Index
• Sample of business units representing Qatar’s economy is selected
• 500 business owners and senior executives across business units are
surveyed
• The Q3 survey was conducted during June 2010
• Respondents are questioned about their expectations on relevant
business parameters
• Survey also captures respondent feedback on current business
conditions
Survey
Composite Business Optimism Index
• The Composite Index is calculated separately for the hydrocarbon and non hydrocarbon sectors
• Within the non hydrocarbon sector the index is calculated:
– for the six individual indices
– for the five sub sectors within
• For the hydrocarbon sector the Composite Index takes into account the aggregate behavior of the three individual indices
World Economic Outlook
• Global economy expected to grow 4.6% in 2010, up from April forecast of 4.2%
• The US economy registered growth of 2.7% in Q1 2010 as against a revised GDP
growth rate of 5.6% in Q4 2009. 2010 growth revised upward to 3.3%
• The global composite PMI showed expansion (i.e. scoring > 50) for the eleventh
consecutive month
Source: IMF forecast, Q1 2010 are actual figures Source: JPMorgan and Markit
Global composite manufacturing & services PMIReal GDP (%)
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
Q1 2009 Q2 2009 Q3 2009 Q4 2009
Manufacturing Construction
Trade, Restau & Hotels Finance, Ins, Real Est & Bus Ser
Transport & Comm Mining & quarrying (sec axis)
GDP at current prices (sec axis)
Economy of Qatar
• Qatar’s nominal GDP growth in Q4
2009 over the previous quarter was
9.7%; mining & quarrying sector grew
23.8%
• Real GDP growth is expected to surge
from 8.7% last year to 18.5% in 2010
• Higher oil & gas revenues will lead to
a surge in current account balance
from US$ 14 bn in 2009 to US$ 28 bn
in 2010
Quarterly GDP 2009 (QAR mn)
780
792
805
776
814 815821
750
760
770
780
790
800
810
820
830
Q309 Q409 Q110 2009 Mar-10 Apr-10 May-10
'00
0 b
pd
Crude oil production
Source: OPEC
Composite Business Optimism Indices
Non Hydrocarbon Sector Hydrocarbon Sector
• Business optimism in the non hydrocarbon sector lifted by improvement in all parameters
• Surge in hydrocarbon optimism mainly due to an increase in level of selling prices expectation
69 66
34
7
2128
24 27
39
0
10
20
30
40
50
60
70
80
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
95
70
-37
-6 -5
25 28
12
46
-40
-20
0
20
40
60
80
100
120
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
Business Optimism Indices Trend – Non Hydrocarbon Sector
7882
41
9
34
49
38 41
49
0
10
20
30
40
50
60
70
80
90
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
BO
I In
dex
Volume of Sales
76
63
40
19
37
24
3339
49
0
10
20
30
40
50
60
70
80
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10B
OI I
ndex
New Orders
5952
8
-18
-4
51
7
19
-30
-20
-10
0
10
20
30
40
50
60
70
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
BO
I In
dex
Selling Prices
66
74
37
3
26
37
3027
46
0
10
20
30
40
50
60
70
80
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
BO
I In
dex
Net Profits
66
60
42
24
12
25
19 20
34
0
10
20
30
40
50
60
70
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
BO
I In
dex
Number of Employees
51
61
13
1
23
41
13
5
33
0
10
20
30
40
50
60
70
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
BO
I In
dex
Level of Stock
Manufacturing Sector
• The Global Manufacturing Purchasing Managers’ Index has shown growth for twelve
consecutive months
• Manufacturing sector BOI increase on the back of improvement in hiring outlook
• BOI for Sales Volume drops but for New Order increases, suggesting mixed
demand outlook in the third quarter
Global Manufacturing Purchasing Managers’ Index
Source: J P Morgan and market economics in association with ISM and IFPSM
Manufacturing Sector: Composite Index
Construction Sector
• The global construction sector is witnessing a gradual upturn; sector is evolving
as emerging markets continue to drive global recovery
• Strong demand expected in the construction sector as BOI for Volume of Sales
has jumped to 49 as against 26 in previous quarter
• The BOI for Level of Selling Prices has stayed stable, reflecting recent correction
in international commodities market
Construction sector: Composite Index
Trade & Hospitality Sector
• Retail sector growth in developed countries likely to remain slow whereas emerging markets are expected to
witness rising retail sales in 2010
• In Qatar, respondents are optimistic about the sector due to expectations of a huge increase in BOI for level
of selling prices which moved to 26 from -5 in Q2
• Demand levels are expected to improve modestly
Trade & Hospitality sector: Composite Index
23
13 1317
46
0
10
20
30
40
50
Q309 Q4 09 Q1 10 Q2 10 Q3 10
Ind
ex
Transportation & Communication Sector
• Global transportation sector showing strong signs of revival amid recovery in
trade sector and increased passenger traffic
• Qatar’s transport and communications sector has shown a substantial
improvement on the back of strengthening demand and better pricing outlook
Transport & Comm. Sector: Composite Index
21
32 31 33
42
0
10
20
30
40
50
Q309 Q4 09 Q1 10 Q2 10 Q3 10
Ind
ex
Finance and Business Services Sector
• The Global Services PMI for the month of May stands at 56.3, showing expansion for the eleventh
month in a row
• Qatar’s finance & business services sector optimism rises on the back of better Selling Price
outlook
• Demand is expected to see modest improvement in third quarter
Finance & Business Services sector: Composite IndexGlobal Services Purchasing Managers’ Index
Source: JPMorgan and Markit
-60
-40
-20
0
20
40
60
80
100
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
In
dex
Level of Selling Prices Net Profits New Employees
Oil & Gas sector
• Oil prices fell by 20% to USD 67 from their early May peak of USD 84 on concerns of
Euro Zone debt crisis, but have risen since then to average USD 73 in June
• Qatar’s hydrocarbon sector optimism has improved significantly in the third quarter
primarily due to a higher BOI score for level of selling prices
• Last quarter’s reading on BOI for Level of Selling Prices (-8) for the hydrocarbon
sector is validated by the decline witnessed in oil prices during May
Hydrocarbon Sector: Composite Index
Other Highlights
•Raw material costs is the leading concern for non hydrocarbon segment, 48% of the respondents have cited it as a factor which might affect their business •Availability of finance is a concern for 29% of the business units in non hydrocarbon sector
•31% of companies in the non hydrocarbon sector intend to investment in business expansion
•For 50% of the companies in the hydrocarbon sector project delays could be a major factor which might impact their business in the third quarter
Conclusion
• Business outlook improves in Qatar despite continuing debt troubles in Euro Zone
• All sub sectors show an improvement in sentiments buoyed by robust demand outlook
• Transport & logistics sector shows major improvement due to improved demand and consequently profitability outlook
• Hydrocarbon sector displays surge in optimism levels on the back of expectations of rise in level of selling prices