Qatar Business Optimism Survey Q2 2010
Presented by Presented by Dun & Bradstreet South Asia Middle East Ltd.Dun & Bradstreet South Asia Middle East Ltd.Qatar Financial Centre (QFC) Authority Qatar Financial Centre (QFC) Authority
• The D&B Business Optimism Index is recognized world over as an
indicator which ascertains the pulse of the business community
• Provides insight into the short-term outlook of business units on
sales, profit growth, investment, etc.
• Provides analysis of major trends, outlook and issues concerning
the business units
Business Optimism Index
• Sample of business units representing Qatar’s economy was selected
• 500 business owners and senior executives across different industry
sectors were surveyed
• Survey conducted during March 2010 for the 2nd quarter of 2010
• Respondents are asked questions about their expectations on relevant
business parameters
• Survey also captures respondent feedback on current business
conditions
Survey
Composite Business Index
• The Composite Business Index is calculated separately for the hydrocarbon and non hydrocarbon sector
• For the non hydrocarbon sector, the Composite Index captures the weighted aggregate behavior of five individual indices
• For the hydrocarbon sector, the Index takes into account the weighted aggregate behavior of three individual indices
40.3
37.4
40.1
43.2 44.0
48.1 48.2
52.053.2
54.2
51.753.1 53.2 53.6
30.0
35.0
40.0
45.0
50.0
55.0
60.0
Jan-
09
Feb-
09
Mar-0
9
Ap
r-09
May-
…
Jun-
09
Jul-0
9
Aug-
09
Sep-
09
Oct-0
9
No
v-09
Dec-
09
Jan-
10
Feb-
10
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
2008 2009 2010 2011
World Advanced Economies
Emerging and developing economies Middle East
World Economic Outlook
• Global economy expected to grow 3.9% in 2010, emerging economies to expand 6.0%
• US economy registered 5.6% growth in Q4 2009, fastest since third quarter of 2003
• Global composite PMI indicates continued expansion of manufacturing and services
industry activity
Real GDP Growth Global composite manufacturing & services PMI
Source: IMF Source: JP Morgan and market economics
0
5
10
15
20
25
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2007 2008 2009 2010
Crude oil and ref ined petroleum products exports LNG and related exports
Current account Central Bank reserves, net
Real GDP Growth (% Change - RHS)
Economy of Qatar
• Qatar’s real GDP is expected to
expand by 18.1% in 2010
• Continued government support
and increased hydrocarbon
revenues to boost the economy
• Central Bank’s net reserves
estimated at US$ 19.3 bn (2009),
up from US$ 9.8 bn in 2008
Qatar Economic Indicators
740
750
760
770
780
790
800
810
820
Q209 Q309 Q409 2009 Dec-09 Jan-10 Feb-10
Average Oil Production
Source: IMF
Source: OPEC
% C
han
ge
Composite Business Optimism Indices
6966
34
7
2128
24 27
0
10
20
30
40
50
60
70
80
Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210
95
70
-37
-6 -5
25 2812
-60
-40
-20
0
20
40
60
80
100
120
Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210
Non Hydrocarbon Sector Hydrocarbon Sector
• Business optimism in the non hydrocarbon sector has stabilized in last two quarters
• Drop in selling price optimism becomes a drag on the hydrocarbon sector outlook
Business Optimism Trends – Non Hydrocarbon Sector
76
63
40
19
37
24
3339
0
10
20
30
40
50
60
70
80
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10B
OI I
ndex
New Orders
5952
8
-18
-4
51
7
-20
-10
0
10
20
30
40
50
60
70
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
BO
I Ind
ex
Selling Prices
66
74
37
3
26
3730 27
0
10
20
30
40
50
60
70
80
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
BO
I In
dex
Net Profits
51
61
13
1
23
41
13
5
0
10
20
30
40
50
60
70
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
BO
I Ind
ex
Level of Stock
6660
42
24
12
2519 20
0
10
20
30
40
50
60
70
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
BO
I In
dex
Number of Employees
7882
41
9
34
49
38 41
0
10
20
30
40
50
60
70
80
90
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
BO
I In
dex
Volume of Sales
30
35
40
45
50
55
60
Feb-07
Apr-07
Jun-07
Aug-07
Oct-
07
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-
08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-
09
Dec-09
Feb-10
63
47
15
50
11
4544
14
1
3220
3338
50
9
32
19 20
54
41
6
39
104
0
10
20
30
40
50
60
70
Volume of Sales
New Orders Level of Selling Prices
Net Profits Number of Employees
Level of Stock
Inde
x
Q3 2009 Q4 2009 Q1 2010 Q2 2010
Manufacturing Sector
• Global manufacturing activity suffers a slight dip, February reading at 56.5 as compared
to 58.4 in the previous month
• Qatar manufacturing sector optimism mixed as volume of sales parameter improves but
new orders decline
Global Manufacturing Purchasing Managers’ Index
Source: JP Morgan and market economics
BOI - Manufacturing Sector GDP
8.3%
19 21
-19
14
4 4
71
38
16
59
40
58
27 30
-7
33
169
26
43
5
2024
8
-30
-20
-10
0
10
20
30
40
50
60
70
80
Volume of Sales
New Orders Level of Selling Prices
Net Profits Number of Employees
Level of Stock
Ind
ex
Q3 2009 Q4 2009 Q1 2010 Q2 2010
GDP
4.9%
Construction Sector
• Global construction sector currently driven by infrastructure spending as commercial
property undergoes correction
• Demand outlook for Qatar’s construction sector shows signs of improvement with increasing
optimism on new orders
• Profitability levels are expected to stay muted due to higher raw material costs
BOI – Construction Sector
13
31
-9
-3
-76
43
3
15
28
16
35
2420
-5
20 19
8
33 33
-5
10
27
5
-20
-10
0
10
20
30
40
50
Volume of Sales
New Orders Level of Selling Prices
Net Profits Number of Employees
Level of Stock
Ind
ex
Q3 2009 Q4 2009 Q1 2010 Q2 2010
Trade & Hospitality Sector
• Global wholesale/retail trade & hospitality sector continues to be on the growth track
• Volume of Sales and new orders indicate improved demand conditions in Qatar for the
second quarter
• Hiring outlook improves as 47% of respondents are expected to add staff
BOI – Trade & Hospitality sectorGDP3.3%
24
45
0
2522
31
-12 -5
232826
35
-16 3
15
31
23
38
20
-20
-10
0
10
20
30
40
50
Volume of Sales
New Orders Level of Selling Prices
Net Profits Number of Employees
Ind
ex
Q3 2009 Q4 2009 Q1 2010 Q2 2010
Logistics & Communication Sector
• Global Logistics & communications sector expected to witness gradual recovery in 2010
• Demand outlook for Qatar’s logistics & communication sector mixed as new orders
parameter registers a 12 point drop while volume of sales parameter improves
BOI – Logistics & Comm. sectorGDP
3.3%
38.6
41.543.7 43.2
47.4 46.5
50.552.6 53.0
50.351.8 51.2
52.6
30
35
40
45
50
55
Feb
-09
Mar
-09
Apr
-09
May
-09
Jun
-09
Jul-
09
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan
-10
Feb
-10
33 35
-10
2521
50 50
4
37
22
55
26
10
41
24
4743
13
38
24
-20
-10
0
10
20
30
40
50
60
Volume of Sales
New Orders Level of Selling Prices
Net Profits Number of Employees
Inde
x
Q3 2009 Q4 2009 Q1 2009 Q2 2010
Finance and Business Services Sector
• The Global Services PMI reading suggests continued expansion of business activity
• Half of the respondents in Qatar’s Financial and Business Services sector expect to get new
orders in Q2 2010
• Sector outlook with regards to Net Profit and Number of Employees shows signs of stabilization
BOI – Finance & Business Services sectorGDP9.9%
Source: JP Morgan and market economics
Global Services Purchasing Managers’ Index
38.641.5 41.4
45.850.2
55.8
69.6
64.6
71.467.2
72.776.3
74.076.0
73.077.2
30.0
40.0
50.0
60.0
70.0
80.0
Dec
-08
Jan
-09
Feb
-09
Mar
-09
Apr
-09
May
-09
Jun
-09
Jul-
09
Aug
-09
Sep
-09
Oct
-09
Nov
-09
Dec
-09
Jan
-10
Feb
-10
Mar
-10
-20
-10
0
10
20
30
40
50
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
Ind
ex
Level of Selling Prices Net Prof its New Employees
Oil & Gas sector
• Selling prices outlook dampens optimism of the hydrocarbon sector
• 53% respondents expect to add new employees during Q2 2010
GDP
61.7%
BOI – Hydrocarbon SectorOPEC Monthly Price Basket
Other Key Highlights
•Raw materials cost continues to be a major concern for the manufacturing sector •37% of the non hydrocarbon respondents expect borrowing conditions to improve during the quarter
•One third of companies in the non hydrocarbon sector plan to invest in business expansion
•60% of companies in the hydrocarbon sector expect to face project delays
Conclusion
• Business Optimism levels in Qatar’s non hydrocarbon sector improve slightly in Q2 2010
• Improvement in volume of sales and new orders indicates stable demand outlook for the non hydrocarbon sector
• Qatar’s trade and hospitality sector expect better demand conditions in the second quarter
• Despite turbulence witnessed in the international financial markets during the last quarter, optimism levels in finance & business services sector registers a minor improvement