A closer look at Kuwait, Qatar, and Lebanon’s non-oil sectors in September: Purchasing manager indices (PMI) tracking non-energy sectors brought similar growth trends across the three countries. Kuwait and Qatar saw continued improvement in their non-oil sector, but at softer rates, while Lebanon expanded at a record pace.

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 continued its expansion in September, albeit at a slower pace, according to S&P Global’s PMI (pdf). The country’s headline PMI slightly fell to 52.2 in September, from 53.0 in the previous month. September reading puts Kuwait’s non-oil private sector above the 50.0 mark for healthy growth for its 13th consecutive month, but it signalled the least pronounced improvement in seven months.

“Although there were further signs of a growth slowdown in Kuwait’s non-oil private sector in September, rates of expansion remained solid, so there is little cause for alarm at this stage,” S&P Global’s Andrew Harker wrote in the report.

New orders and output softened to the lowest level in a year during September, yet they remained solid, according to the report. Firms cited promotion efforts, competitive pricing, and advertising as key factors behind growth in output and new orders. Meanwhile, export orders accelerated to a three-month high, buoyed by discounting strategies.

Hiring remained limited due to cost concerns, leading to only a marginal increase in job creation. As a result, outstanding business accumulated for the twelfth month in a row, maintaining the same level as August, according to the report.

Purchasing activity and inventory holdings expanded at the slowest pace in six months in September. The expansion was mainly driven by an increase in new orders and businesses capitalizing on competitive prices to build up their stocks.

Input costs saw a marginal increase in September, yet they remain at the second-lowest level since December 2022, with this slight uptick observed in maintenance, spare parts, stationery, transportation, and utilities, in addition to staff costs. In turn, output inflation accelerated slightly for the seventh month in a row, in a bid from firms to maintain their profitability.

Positive sentiment: Business confidence regarding the upcoming year’s output improved in September, compared to August. “Firms remain confident that their pipeline of work will be sufficient to keep output rising over the coming year,” Harker wrote.

QATAR-

Non-oil activity in Qatar remained in the expansion territory in September, but grew at a softer pace as new orders continued to dip for the fourth straight month, according to the S&P Global PMI (pdf). The country’s headline index fell to 51.5 in September, down from 51.9 in August, marking the 21st consecutive month that the index has remained above the 50.0 no-change threshold.

Driving the growth: “The overall improvement in business conditions was underpinned by growth of employment, output and inventories in September,” S&P Global’s Trevor Balchin noted in the report. Meanwhile, the headline reading was curbed by lower new orders and shorter suppliers’ delivery times.

Qatar rounded off the strongest quarter of 2025 so far, with PMI averaging 51.6 over 3Q 2025, marking higher growth than 51.1 in the first quarter and 51.2 in the second, but below the long-run average of 52.2 since 2017.

Job creation softened in September from a record high a month earlier, but remained among the highest in the survey’s history, with this hiring being focused on sales, marketing, operations, and management teams. All four monitored sectors reported workforce growth, with manufacturing again at the forefront.

Output across the non-oil private sector posted a modest uptick, marking the fourth expansion in the past six months. Meanwhile, outstanding work grew for the tenth month in a row, signalling ongoing capacity constraints. However, the recent dip in new business led backlogs to rise at the weakest pace in the current sequence, according to the report.

Overall input inflation dips, but output costs pick up: The rate of staff cost inflation remained among the highest on record, as Qatari firms continued to increase wages significantly last month. Meanwhile, average purchase prices accelerated at a four-month high, but overall input costs fell for the second time in a row. Prices charged for goods and services posted their first increase since July of last year, albeit the uptick was modest.

Firms’ sentiment for business activity for the year ahead remained optimistic, but softened from August on the back of a dip in new orders. Companies pointed to real estate expansion, demand from a rising expatriate population, marketing drives, investment, and economic development as the key factors behind this positive prospect. “The year-ahead outlook for activity eased since August but was only slightly below the survey’s long-run trend,” Trevor wrote.

The bigger picture: Looking ahead, non-oil sector activity across the Gulf, excluding Saudi Arabia, is forecast to “hold up relatively well over the rest of this year and in 2026. Even if oil prices drop back, budget and current account positions will remain in sizable surpluses, enabling governments to keep fiscal policy supportive,” Capital Economics’ James Swanston wrote in a recent research note seen by EnterpriseAM. In turn, Saudi Arabia’s plans to slash spending by 2% in 2026, with the aim of curbing its fiscal deficit to 3.3% from 5.3% this year, are projected to weigh on the kingdom’s non-oil private sector, he added.

OVER IN LEBANON-

The Lebanese non-oil private sector gained more momentum for the second straight month to hit a record pace in September, boosted by new orders and business activity, according to Blominvest Bank’s Lebanon PMI (pdf). The country’s headline PMI climbed to 51.5 from 50.3 in August, making the fastest improvement in the survey’s history, which began in May 2013.

Business activity and new orders soared at their quickest pace on record in September, encouraging businesses to enhance their purchasing volumes and boost their stocks. This spike in new orders triggered a further and quicker increase in backlogs of work, with the rate of accumulation jumping to a seven-month high, according to the report.

Politics played a key role: “The government’s landmark disarmament plan for Hezbollah — which we hope will remain solid — sent a powerful signal of state authority and will help to bolster confidence and better investment prospects,” Blominvest Bank’s Jana Boumatar wrote in the report.

But input costs surged at their fastest pace in over two years, prompting Boumatar to caution that sustaining this rebound will require more efforts to curb inflationary pressures and advance “credible reforms.” This was primarily driven by higher import prices, along with an increase in shipping and customs costs. In turn, firms raised their charges to the largest level since March 2023.

Firms continued to boost their purchasing activity in September, but at a slower rate from August’s five-month upturn. This expansion pushed companies to build up their inventories during September, despite supply-chain constraints. Stocks of purchases rose for the third consecutive month at the end of 3Q, recording the highest rate since February.

Employment held steady in Lebanon during September, after six months of marginal reductions.
Still, business sentiment remains downbeat, with firms maintaining a negative outlook for the year-ahead, citing security concerns.

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