How Kuwait, Qatar and Lebanon 's non-oil private sector fared in June: Purchasing manager indices (PMI) tracking non-energy sectors brought mixed results across the three countries in June. Both Qatar and Kuwait successfully stayed in the positive territories, albeit Kuwait saw a dip in the growth rate, while Lebanon remained in the contraction territory.

REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

KUWAIT-

Non-oil activity in Kuwait saw a slight slowdown in June, yet “still signalling a solid monthly

improvement in business conditions” for the month, according to S&P Global’s PMI (pdf). Kuwait’s headline reading fell to 53.1 in June from 53.9 in May. While Kuwait’s PMI June reading puts the country above the 50.0 mark for healthy growth for its tenth consecutive month, it is still below April’s 54.2 reading — the highest headline figure for the nation in over five months.

New orders continued to expand at a marked pace at the end of 2Q 2025, leading to a record increase in employment as companies worked to manage their workloads, according to the report. Firms also saw their output increase, though the rates of expansion in both new orders and output eased. Total new business got a boost from a series record increase in new export orders, the report noted.

Input costs accelerated in June, meaning that firms increased selling prices for the fourth consecutive month. This led to the fastest pace of output price inflation in a year, despite efforts to price competitively, the report added. "Sustained rises in workloads and increasing confidence for the year ahead have been good news for the Kuwaiti labour market, with companies looking to take on additional staff to keep on top of orders,” S&P Global’s Andrew Harker stated in the report. “That said, even a series record rise in employment in June wasn't enough to prevent a further build-up of outstanding business, suggesting further capacity enhancements may be needed in the months ahead,” Harker added.

Price cuts boost non-oil business growth, confidence surges: “Price discounting and improved marketing strategies are expected to help lead to further increases in non-oil business activity over the next 12 months,” the report read, noting that “business confidence strengthened for the second month running and was the highest since May 2024.”

QATAR-

Non-oil activity in Qatar continued its positive trend in June, with the S&P Global PMI (pdf) remaining above the no-change mark of 50.0 for the eighteenth consecutive month. Qatar’s headline reading increased to 52.0 in June from 50.8 in May, indicating the strongest overall rate of growth since March. This expansion was bolstered by a further rapid increase in hiring

and renewed growth in activity.

The decline in new orders and input stocks as well as faster suppliers' delivery times weighed on overall business conditions, according to the report. “Growth remained modest overall, however, as the PMI has not beaten its long-run average of 52.2 so far this year. This can mainly be attributed to intermittent and muted growth of output and new orders, with the non-energy sector not registering concurrent growth in these two indicators since December 2024,” S&P Global’s Trevor Balchin said in the report.

Employment saw one of its strongest increases in the eight-year survey history, which is partly attributed to “efforts to address a faster build-up in outstanding work,” the report noted. Qatari firms also continued to increase wages and salaries at a marked pace in June. This “ongoing hiring was corroborated by another rise in outstanding business in June, and at the fastest rate since last October,” Balchin said.

Firms maintain an optimistic outlook: “Companies in the non-energy private sector remained optimistic regarding the 12-month outlook for activity in June. Confidence was linked to economic development in sectors including real estate, construction and industry, and to growth of the expat population, international investment and tourism. Sentiment moderated since May, however, and was below the long-run survey average since 2017,” the report read.

Gulf non-oil sectors conclude 2Q 2025 robustly, but headwinds loom: The Gulf’s non-oil sectors wrapped the 2Q 2025 with strong performance, despite the coinciding regional escalation between Iran and Israel. However, signs pointing to a softening of activity ahead. “Tensions have since eased, but there may be a lingering drag on activity due to security fears which, coupled with oil prices back below $70pb reducing the scope for fiscal support, means that non-oil GDP growth is likely to soften in the coming quarters,” Capital Economics’ James Swanston wrote in a research note seen by EnterpriseAM.

The UAE, Qatar, and Kuwait are set to maintain fiscal policy supportive, thanks to their strong balance sheets, Swanston noted. In contrast, Saudi Arabia, Oman, and Bahrain face an upcoming period of fiscal consolidation, which is expected to cause non-oil growth to slow, Swanston added.

OVER IN LEBANON-

Lebanese non-energy private sector remained in the contraction area in June, yet the pace of decline eased slightly from May, according to Blominvest Bank’s Lebanon PMI (pdf). The nation’s headline figure registered 49.2 in June, an uptick from 48.9 in May. Despite the slight increase, it remains below the 50.0 no-change mark for the fourth consecutive month.

New orders continued to fall in June, “with the rate of reduction consistent with the average trend observed during 2Q 2025, the report noted. This decline was attributed to security risks in the region on the back of the conflict between Israel and Iran. Export sales also saw a moderate decrease, yet not as sharp as it was in May. “The escalation of the war between Iran and Israel resulted in weaker customer sales and client cancellations, leading to a drop in business activity,” Blominvest Bank’s Fadi Osseiran wrote in the report.

Input cost pressures intensified once more in June, which was largely attributed to higher prices paid for purchased inputs, the report noted. “Purchase prices incurred by companies surged at the fastest pace in eight months, and these increases were passed to their clients,” Osseiran stated, adding that “what is unfortunate is the sharp drop in the Future Output Index, revealing pessimism at private sector companies regarding future outlook, as 53% of respondents expect activity levels to diminish in the upcoming 12 months.”

Business confidence plummets to seven month-low: Firms’ sentiment regarding the 12-

month outlook for output worsened sharply from May,“ with firms in general predicting activity to fall,” the report noted, adding that “the degree of pessimism was the greatest observed since November 2024.”

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