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Business Optimism higher in Q4 2008, according to Business Optimism Index for Qatar

Qatar: Sunday, September 28 - 2008 @ 11:26

The Dun & Bradstreet Business Optimism Index for Qatar, despite being conducted amidst a weakening of economic growth expectations in developed countries and a cooling off of energy & commodity prices, reflects strong growth on the part of the Qatari economy in the past quarter. According to the survey, Qatari businesses are expecting their sales volume and net profits to growth further in Q4 and the business expansion trend identified in Q3 continues to be a top business priority.

Commenting on these findings, Shashank Srivastava, Director of Strategy and Planning at the Qatar Financial Centre Authority states:

“The Business Optimism Index shows positive sentiments at the micro level which reflect the strong growth displayed by the Qatari economy at the macroeconomic level. Further, the Optimism survey makes evident that the government’s economic diversification policies have had a positive impact on business. Only 3% of companies predict a fall in sales, while a substantial 85% expect an increase.”

Inflation aided by supply bottlenecks continues to be a key business concern; 46% of the companies cite rising input prices to be the biggest factor impacting their operations in the coming quarter. However, the survey reveals some signs of cooling off of price rises compared to the last quarter. “The number of units forecasting a rise in their selling prices has decreased from 63% in Q3 to 58% in Q4, while a substantial 37% are expecting no change in their selling prices over the next quarter,” says Ms. Rajni Thakur Sr. Economist at Dun & Bradstreet. “However, any visible impact on the inflation levels in the economy might take at least a couple of quarters more to be evident,” she adds.

Business expansion plans, as in Q3 2008 remains at the top of the investment agenda of Qatari business units, though the number of units has gone down from 49% in Q3 2008 to 44% in Q4 2008. “This slight decline can be partially attributed to the fact that the construction sector seems to be constrained by supply bottlenecks, with only 26% of the units planning any business expansion in this quarter, compared to 53% in the last quarter.” explains Thakur.
“Despite this tapering, investment in technology and machinery, which is crucial for the continued growth of an economy, is getting its due share of importance with 27% of all respondents citing it to be their top investment priority compared to 10% in Q3 2008,” adds Mr. Srivastava.

Commenting on the expectations of the finance sector, David Proctor, Chief Executive Officer of al khaliji, states “It’s interesting that the survey trends that emerged last quarter are emphasized again this quarter. Businesses remain optimistic but have more concerns about rising prices and supply bottlenecks. The benefit of the quarterly survey structure is the immediacy of the information available, so next quarter it will be fascinating to see whether local businesses in Qatar are feeling any effects from the current turmoil in the US financial system.”

Business optimism indices are commonly used to better identify and understand the growth expectations of the business community and its response to current developments within an economy. Issued quarterly, the Business Optimism Index for Qatar will be based on an extensive survey conducted amongst the Qatari business community and will be one of the most effective ways to keep track of where businesses think the Qatari economy is moving. The next Business Optimism Index on Qatar will be released in January 2009.

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Sunday, September 28- 2008 @ 11:26 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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