Optimism among Qatar's construction industry in the second quarter of 2014 is at its highest for three years, according to the Dun & Bradstreet Business Optimism Index.
The optimism score for the sector rose to 54, up from 51 in Q1 and 41 in Q2 2013. The quarter-on-quarter rise was due to higher scores for selling prices, net profits and hiring while the volume of sales parameter gained 17 points year-on-year, driven by expectations of new projects from government as well as private sector, a statement said.
The index also revealed that the finance, real estate and business services sector recorded its second highest optimism score since the first quarter of 2011.
The survey said the construction sector's rise stems from the strong Qatari economy, higher demand for insurance for new construction and an increase in savings and investment by a growing population.
Within the finance, real estate and business services sector, the outlook for finance and insurance firms was stronger than for real estate and business services firms on volumes, new orders and profits.
Real estate and business services firms, however, were more optimistic about selling prices and hiring, the survey said.
"These firms are benefiting from the expected rise in construction activity, which is pushing up demand for related services such as architecture and engineering consulting, building material testing and manpower supply," a statement said.
It added: "Moreover, the growing number of companies establishing offices in Qatar is increasing the optimism of business services firms dealing with corporates in areas such as IT, advertising and auditing."
The index for the consolidated non-hydrocarbon sector was at 47 points, up seven points year-on-year but down two points from Q1. The decline was mainly due to seasonal factors, specifically the impact of the coming summer season on sectors such as trade and hospitality and related services, such as event management.
The underlying trends in the non-hydrocarbon sector remained firm, the survey found. Of respondents in the non-hydrocarbon sector, 59 percent said they expect higher net profits, 65 percent expect higher sales and 67 percent expect higher orders in Q2.
Comparing large companies and SMEs, the survey said large companies are more confident about sales volumes and profitability than SMEs, but the latter are more optimistic about new orders, selling prices and employment.
Yousef Mohammed Al-Jaida, deputy chief executive officer of the QFC Authority which sponsors the survey, said: "This latest BOI Survey shows that Qatar's finance, real estate and business services sector continues to strengthen.
"No fewer than 64 percent of respondents in the sector expect higher profits in the second quarter of 2014. Construction is emerging as a major force behind the sector's growth as well as boosting Qatar's economy more generally. These trends are further evidence of the extent to which the economy is diversifying."
Arabian Business
2 June
