Non-Oil Growth Stalls in Qatar as Conflict Dampens Business Confidence

RIYADH — Qatar’s non-energy private sector continued to struggle in May, with a sharp drop in new business inflows as the regional war dampened activity, according to S&P Global.

The country’s Purchasing Managers’ Index fell to 45.9 in May from 46.4 in April, signaling a worsening of business conditions. Any reading below 50 indicates contraction.

New business declined sharply, driven by weaker demand linked to ongoing regional tensions, market instability, and uncertainty. Sectors such as tourism and construction were hit hardest.

Employment rose for the 22nd consecutive month, but at the weakest pace in that sequence. Wage inflation also cooled. However, input price inflation accelerated to its highest level since October 2024, leading firms to raise prices at the strongest rate since December 2022.

Despite the downturn, output levels showed signs of stabilization, and the 12‑month business outlook improved slightly. “Firms expressed cautious optimism, citing potential improvements in market conditions if geopolitical tensions ease,” said Trevor Balchin, economics director at S&P Global.

In contrast, Saudi Arabia’s non-oil PMI stood at 52.8 in May, well above the 50 threshold, while the UAE recorded 52.6.

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