Kuwait releases its first ever public Purchasing Manager Index

How Kuwait + Qatar’s non-oil private sector fared in March: Purchasing Manager Indices (PMI) tracking non-energy sectors in Kuwait and Qatar both saw growth, attributable to robust demand, output, and new orders. Kuwait's’ first PMI report places the country’s non-oil private sector solidly in growth, while Qatar’s headline figure continues to indicate growth, but at a softer rate than that observed in the previous month.

Kuwait’s first public PMI is here: Kuwait’s first publicly released PMI showed stronger growth, an S&P Global Kuwait PMI (pdf) showed. The headline figure inched up to 53.2 in March from 52.7 in February, and remained above the 50.0 threshold separating contraction from growth. Output and new orders rallied on the back of stronger demand due to competitive pricing and advertising efforts, and business confidence also improved, driving the reading higher. Meanwhile employment increased only fractionally in March, risking larger backlogs, while input and output prices continued to rise.

Backlogs are rising as employment struggles to keep up with new orders: Recent months have seen only marginal increases in staff levels, despite sharp new orders in growth, seeing backlogs accumulate for 14 consecutive months, the report noted. If new orders continue to grow, firms will need to boost their employment to keep up with projects and prevent delays, Economics Director at S&P Global Market Intelligence Andrew Harker said in the report.

Purchasing activity and stocks of inputs increased as firms sought to keep up with demand and meet orders in a timely manner, the report added. Supplier delivery times also trimmed further, but at their least extent since July 2022. Input costs also perked up, amid a rapid increase in purchase prices, with some respondents citing higher computer and printing-related costs. Staff costs surged at their highest rate in the survey’s history. Businesses also hiked their selling prices in a bid to augment profit margins in the face of rising input costs. Inflation quickened for the third month in a row, and was the sharpest in two-and-a-half years.

Kuwaiti business confidence strengthened in March, with the offering of good quality products at competitive prices set to further boost output over the coming year. One third of respondents see business activity growing in the next 12 months.

Over in Qatar: Qatar’s PMI continued to show sustained growth in March, as boosts to output, new orders, employment, and purchasing buoyed the index, according to Qatar Financial Center’s PMI (pdf) report for March. Qatar’s headline number tracked at 50.6, down from 51.0 in February, signaling improved business conditions, and placing it above the 50.0 threshold separating growth from contraction. A draw down in input inventories was cited among the few factors weighing down Qatar’s headline figure.

Demand for goods and services continued to boom in March, with firms attributing growth to new customers, competitiveness, and high-quality products. Nonetheless the rate of growth was softer, enabling a faster reduction in backlogs. Employment also increased for a twelfth consecutive month, the report showed.

Purchases of inputs rose, albeit slightly, for the first time in three months, as firms looked to shore up depleted inventories, the report explained. Lead times also shortened for their twenty-third successive month, alleviating pressure on supply chains. Input prices, wages, and purchase costs were stable in March. Nonetheless, output prices rose for the first time in five months, and at their fastest rate since February 2023 suggesting better margins and higher profitability for Qatari firms at the close of this year’s first quarter.

Qatari businesses were upbeat about the next 12 months, with respondents citing new clients, development strategies, and drives to raise profitability as reasons to be hopeful.

ICYMI- The UAE and Saudi Arabia’s non-oil private sectors continued to expand in March at slower rates, with the UAE’s headline reading inching down to 56.9 from 57.1 in February on the back of the weakest supply chain performance in a year. KSA’s headline also fell to 57.0 in March from 57.2 the previous month. Egypt’s PMI rose slightly to 47.6 in March from 47.1 in February, indicating continued deterioration, but at a softer rate.