Doha, 27 January 2010
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Finance, insurance, real estate & business services firms upbeat on demand
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Hydrocarbon sector optimism rises sharply on the back of higher energy prices
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Retreat in overall optimism levels regarding sales, profits, selling prices and hiring
Dun & Bradstreet South Asia Middle East Ltd (D&B) in association with Qatar Financial Centre (QFC) Authority has released the D&B Business Optimism Index for Qatar for Q1 2010.
The Business Optimism Survey for Q1 2010 was conducted in late December amidst an environment of relatively buoyant commodity prices and renewed expansion in economic activity around the globe. While household demand remains weak in much of the industrialized world, rising stock markets indicate that investors have regained some of the confidence that was lost during the worst of the financial crisis.
Rebounding oil & gas prices have provided a boost to the Gulf region, as revenues from the hydrocarbon sector have helped GCC governments to maintain stimulus support to their respective economies. With activity in global manufacturing and services industries once again expanding, world oil & gas demand is expected to recover further this year. However, the ongoing correction in the real estate market should ensure inflationary pressures remain muted in the Gulf region.
Overall optimism levels among Qatari businesses have retreated marginally in Q1 2010 following a marked upward swing in the previous quarter. The Composite Business Optimism Index for the non-hydrocarbon sector stands at 81.2 in Q1 2010 as compared to 82.1 in Q4 2009. The modest decline suggests some concern about the strength of the recovery in demand for goods and services facing Qatari firms. Still, business optimism remains significantly higher than in Q3 last year, when the Index stood at 70.4.
For the current quarter, five out of six parameters studied by the survey have shown a decline in resultant optimism levels. However, all six parameters show positive readings, indicating more firms expect increase than decrease in the various measures. New orders is the only parameter to show a net increase in optimism level as more firms expect an improved order book status in Q1 than in Q4. In the non-hydrocarbon segment, the finance, insurance, real estate & business services sector leads the BOI survey in sales, profitability, selling prices and number of employees outlook.
Optimism levels have improved significantly in the oil & gas industry, reflecting a strengthening in global energy markets at the end of last year. The Composite Business Optimism Index for the hydrocarbon sector stands at 99.3 in Q1 2010, up from 80.8 in Q4 2009 and 52.1 in Q3 2009. Expectations improved for two of the three parameters monitored in this sector with particular optimism regarding the level of employees. The outlook for net profits, by contrast, has receded.
Commenting on the findings of the survey, Phil Strange, CFO of Dun and Bradstreet South Asia Middle East Ltd., said: “The latest business optimism survey confirms that the economic fundamentals of Qatar remain intact. While sentiments have eased slightly from last quarter, 2010 is off to a good start with sustained expansion expected across all key business parameters. Oil and gas firms are particularly upbeat with many firms planning to add employees during the current quarter. As the global recovery continues to restore the demand for energy, the Qatar economy stands to benefit, enabling further investment, growth and diversification.”
The Business Optimism Survey also reveals that availability of finance has emerged as the leading concern for Qatar’s business community, with 35% of non-hydrocarbon respondents citing it as the factor that will affect business most in Q1 2010. Nevertheless, 42% of the surveyed businesses expect borrowing conditions to improve during the first quarter. When asked about their growth prospects, 38% of firms plan to invest in business expansion in Q1. In the hydrocarbon sector, project delays continue to constitute the key concern for a majority (60%) of respondents.
Shashank Srivastava, Acting CEO of the Qatar Financial Centre Authority said “The Dun & Bradstreet Business Optimism Index for Qatar continues to provide a fascinating insight into the expectations of some 500 respondents spread right across the business spectrum. Respondents’ sentiments seem to be echoing recent macroeconomic reports which show that Qatar’s economy is among the world’s most robust and fastest growing. It is encouraging to see that within the Finance and Business Services sector, the first quarter outlook remains bullish about current demand with increased optimism regarding sales, prices and profit.”
Business optimism surveys are commonly used to get a better understanding of the growth expectations of the business community and its response to current developments within an economy. Issued quarterly, the D&B Business Optimism Index is based on an extensive survey conducted amongst a large, representative sample of the Qatari business community. This is one of the leading ways to keep track of where businesses think the Qatari economy is moving. The next Business Optimism Index for Qatar will be released in April 2010.
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For further information:
Press Contacts:
Dun and Bradstreet South Asia Middle East Ltd.
Dheeraj Shahdadpuri
Analyst
Tel: +971-4-3695700
Email:shahdadpurid@dnbsame.com
www.dnbsame.com
Qatar Financial Centre Authority
Steve Martin
Director of Marketing and Corporate Communications
Qatar Financial Centre Authority
Tel: +974 496 7755 - email:s.martin@qfc.com.qa
www.qfc.com.qa
About Dun and Bradstreet
Dun and Bradstreet is the world’s premier financial data and business information provider, and widely recognized as the world’s leading business knowledge provider. Established in 1841, the company owns and maintains the world’s largest commercial database containing more than 140 million business records, and provides business information solutions to the world’s business community. D&B is ranked no. 1 in the Fortune list of America's Most Admired Companies 2007 within the Financial Data Services industry. D&B is ranked first in the areas of quality of products/services, financial soundness, long-term investment, quality of management and use of corporate assets.
Dun and Bradstreet South Asia Middle East (D&B) was established in 2003 and offers a suite of information solutions across the region and our services are used extensively by Banks, Financial Institutions, Government Departments, Multinationals, Corporate Entities, Small and Medium sized Enterprises, Exporters and Importers.
About QFC
The Qatar Financial Centre (QFC) is a financial and business centre established by the Government of Qatar and located in Doha. It has been designed to attract international financial services institutions and major multi-national corporations and to encourage participation in the growing market for financial services in Qatar and elsewhere in the region. The QFC operates to international standards and provides a first class legal and business infrastructure for those operating within the QFC. The QFC was created by Qatar Law No. (7) and has been open for business since 1 May 2005.
QFC Authority
The QFC Authority is the commercial, administrative and legislative body responsible for driving the commercial strategy of the QFC and for developing relationships with the global corporate community and other key institutions both within and outside of Qatar.
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