Purchasing Manager Indices (PMI) tracking non-energy sectors in Kuwait and Qatar both continued to expand in April. Both countries’ headline PMIs placed above the 50.0 threshold separating growth from contraction, with growth in Qatar and Kuwait attributed to new orders and boosted output.

Qatar’s non-energy private sector continued to signal strong improvement in business conditions in April as output, new orders, employment, and purchasing activity all grew at a faster pace than in March, according to Qatar Financial Centre’s (QFC) PMI (pdf) report for April. Qatar’s headline number tracked at 52.0 in April, up from 50.6 in March, indicating the largest uptick seen since last September.

A good month for demand + business activity: Demand for goods and services continued to boom in April, with the volume of business intake rising at the fastest pace in seven months in April. Firms attributed the gains to new customers, high quality, and competitive products. Total activity also boomed in April on the back of new projects, and drives to finish off existing workloads. The strong inflows of new work and boosted confidence saw employment rise for its 14th consecutive month amid an uptick in hiring, while purchasing activity surged at the fastest rate seen in ten months.

The latest data signaled weaker inflationary pressures with both input prices and charges falling in April. Although prices eased, the declines were marginal, the report added.

Over in Kuwait: Kuwait’s headline PMI figure also remained in growth territory, with advertising and competitive pricing driving new orders and output, albeit at softer rates, according to Kuwait’s S&P Global PMI (pdf). The headline figure dipped to 51.5 in April, down from 53.2 in March, signaling softer improvement in Kuwait’s non-oil sector at the start of 2Q. Purchasing activity and stock of inputs also increased in April, keeping up with gains in orders and output, but at slow rates.

Backlogs in April persisted due to reduced workforce and shortfalls in raw materials. Despite larger workloads, employment scaled back for the first time in eight months as companies looked to minimize costs. Lower employment numbers restricted the extent to which businesses were able to fulfill orders, S&P Global Market Intelligence Economics Director Andrew Harker said in the report. Staff costs also rose slightly in April, but the increase was marginal and less than that seen in March. With the build up of backlogs, outstanding business accumulated for its fifteenth consecutive month.

Output prices increased modestly in April, as businesses attempted to soften prices for their customers, with some turning to disc. At the same time overall input costs saw a sharp uptick on the back of increases in purchase prices, with purchase cost inflation at its highest since surveys began, if the pandemic period is not included. Surveyists pointed to advertising, machinery, stationary, and transportation as factors driving up costs.

The silver lining: Companies continued to see quicker deliveries from suppliers as vendors attempted to secure new clients by ramping up performance.

Both Qatari and Kuwaiti businesses remained optimistic about the year ahead, with Qatari respondents linking a positive forecast to marketing campaigns, business development plans, and efficiency drives. While Kuwaiti respondents' optimism dipped from March reporting, they maintained a positive outlook due to competitive pricing and marketing for the next 12 months.

Stay tuned for our coverage of Egypt and Lebanon’s reports tomorrow.

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