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Qatar Business Optimism Index Q3 2009

Qatar Business Optimism Index Q3 2009. Presented by Dun & Bradstreet Qatar Financial Centre (QFC) Authority. Business Optimism Index. The D&B Business Optimism Index is recognized world over as an indicator which ascertains the pulse of the business community

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Qatar Business Optimism Index Q3 2009

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  1. Qatar Business Optimism Index Q3 2009 Presented by Dun & BradstreetQatar Financial Centre (QFC) Authority

  2. Business Optimism Index • 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

  3. Survey • Sample of business units representing Qatar’s economy was selected • 500 business owners and senior executives across business units were surveyed • Survey conducted during June 2009 for the 3rd quarter of 2009 • Respondents were questioned about their expectations on relevant business parameters • Survey also captured respondent feedback on current business conditions

  4. Introducing Composite Business Index • The Composite Business Index is calculated separately for the hydrocarbon and non hydrocarbon sector • Weights are assigned to each of the parameters and the base period is chosen to calculate the index • For the non hydrocarbon sector, the Composite Index captures the aggregate behavior of six individual indices • For the hydrocarbon sector, the Index takes into account the aggregate behavior of three individual indices

  5. World Economic Outlook Real GDP Growth (%) World Stock markets • IMF revises world economic growth downwards to -1.4% in 2009, recovery expected in 2010 with 2.5% growth • GDP of United States expected to contract by 2.6% in year 2009, its first since 1991 • Recent emergence of green shoots have boosted sentiments all across the world; stock markets shows recovery from their multi-year lows • GCC growth to rebound to 4.2% in 2010

  6. Economy of Qatar Quarterly Sector GDP (QAR billion) • At QAR 70.9bn, Qatar’s Nominal GDP is 17.5% lower than Q1 2008, but is predicted to recover quickly • Steep decline in hydrocarbon prices, lead to 40% decline in the sector GDP in Q1 2009 over Q1 2008 Source: Qatar statistics quarterly

  7. Business Optimism Indices

  8. Business Optimism Indices Trend The Composite Business Optimism Index for the non- hydrocarbon sector stands at 70.40

  9. GDP 8.3% Manufacturing Sector Global Manufacturing Purchasing Managers’ Index BOI - Manufacturing Sector Source: J P Morgan and market economics in association with ISM and IFPSM • The Global Manufacturing Purchasing Managers’ Index stands at 46.9 in June • 61% of companies expect no change in selling price • Current employment levels to be maintained by 79% of companies

  10. GDP 4.9% Construction Sector Infrastructure construction growth 2008-13 Compound annual growth (%) BOI – Construction Sector • Construction sector worldwide is expected to recover modestly in 2010 due to Governments’ efforts to boost infrastructure spending • Qatar’s construction sector is showing growing optimism about new orders and profitability due to significant Government support • Selling prices are expected to fall due to lower material costs

  11. GDP 3.6% Trade & Hospitality Sector BOI – Trade & Hospitality sector • World exports are expected to decline by 25% in year 2009 due to slowdown in demand • Due to seasonal variations, the trade & hospitality sector in Qatar is likely to face some pressure

  12. GDP 3.3% Logistics & Communication Sector BOI – Logistics & Comm. sector • Global transport sector has been hit by a sharp decline in global trade volumes; recovery expected in 2010 • 58% of the respondents are optimistic on receiving new orders • Higher net profits are also expected by 48% of the companies in the third quarter

  13. Finance and Business Services Sector GDP BOI – Finance & Business Services sector 9.9% • The Global Services PMI for the month of May stands at 43.2 • Sector optimistic on volume of sales and new orders with 50% and 53% of the respondents respectively expecting higher numbers

  14. Oil & Gas sector GDP 61.7% • 39% of the firms expect selling prices to fall, 22% anticipate a rise • The Composite Business Optimism Index stands at 52.13

  15. Other Key Highlights • Trade, logistics & communication sector most concerned about availability of finance • 34% of companies in the non hydrocarbon sector to increase investment in business expansion; 25% have no investment plans • Internal financing is preferred by 53% and 68% of the respondents in the non hydrocarbon and hydrocarbon sector respectively • 61% of companies in the hydrocarbon sector facing project delays • Majority of the companies are expecting the global economy to start recovering by next year

  16. Conclusion • With recent signs of global economic revival, the demand level in Qatar is expected to increase; Manufacturing sector most optimistic • Qatar’s construction industry to get support from Government’s budget allocation which emphasizes on infrastructure development • Activity in finance & business services sector is expected to improve with signs of increased liquidity in the international markets • Downward pressure on prices of goods and services to subside. Inflation edged up 0.6% in May (April 0.2%) • Hydrocarbon sector uncertain on recent crude price rally as demand is expected to remain weak in the medium term.

  17. THANK YOU

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