Kuwait, Egypt and Qatar post stronger non-oil growth on higher orders: PMI

04/12/2025 04:01 AST

Non-oil private sector activity strengthened across Kuwait, Egypt and Qatar in November, with all three economies reporting higher new orders and improving business conditions.

The three countries recorded broad-based gains across output, new business and employment, with Kuwait rising to a four-month high, Egypt posting its first expansion since February and Qatar rebounding to a three-month high, according to S&P Global's latest surveys.

Kuwait's Purchasing Managers' Index rose to 53.4 from 52.8 in October, marking a four-month high and signaling a solid improvement in business conditions.

The expansion was driven by the strongest increase in new orders since June, supported by aggressive marketing and competitive pricing.

In a separate report, S&P Global said Egypt's non-oil sector strongly rebounded in November, with the country's PMI rising to 51.1 from 49.2 in the previous month - marking the first improvement in operating conditions since February.

Qatar joined Kuwait and Egypt in reporting firmer non-oil momentum, with its PMI jumping to a three-month high of 51.8. The survey pointed to renewed increases in activity and new orders, while employment rose at the fifth-fastest pace in the survey's history.

Any PMI reading above 50 signals expansion in non-oil business activity, while readings below 50 indicate contraction.

Strengthening the non-hydrocarbon sector remains a priority for regional economies as they continue to diversify and reduce reliance on crude revenues.

Kuwait sees positive final quarter
Non-oil companies in Kuwait recorded sharper increases in output, new orders, employment, purchasing and inventories in November, supported by successful marketing and competitive pricing strategies.

Securing new orders was central to the latest improvement in business conditions, with total new business expanding at the fastest pace in four months. Surveyed firms also noted a further rise in export orders, helped by offering high-quality products at competitive prices.

Andrew Harker, economics director at S&P Global Market Intelligence, said: "Non-oil firms in Kuwait are enjoying a positive final quarter of the year, with November seeing stronger growth across a range of variables, including output, new orders, employment and purchasing."

Input cost inflation accelerated in November, rising at the steepest pace since June, with purchase prices and staff costs increasing faster than in the previous month.

"The familiar themes of marketing and competitive pricing were behind the latest expansions. The ability of firms to price competitively could be tested soon, however, as cost pressures continue to strengthen," said Harker.

Staffing levels rose as companies sought to deliver projects on time, with job creation quickening to a five-month high. However, the accumulation of outstanding business also continued, reaching its most pronounced level since June 2024.

"Although firms have been ramping up their hiring activities more recently, such that the latest increase was the fastest since June, backlogs of work continued to accumulate. Companies will be hoping that recent recruits can help them to get on top of workloads, otherwise more hiring may be needed in the near future," added Harker.

Looking ahead, non-oil firms remained optimistic that output will increase over the coming year, with sentiment rising for the third straight month to the highest level in 18 months. Marketing strategies and offering high-quality products at competitive prices were key drivers of this outlook.

Egypt's non-oil sector rebounds
In Egypt, business conditions improved sharply as firms reported the strongest increases in output and new orders in five years.

David Owen, senior economist at S&P Global Market Intelligence, said: "The Egyptian non-oil private sector registered its best upturn in business conditions in over five years in November, which hints at a strong end to 2025."

He added: "Historically speaking, the latest PMI reading signals that year-on-year gross domestic product growth could rise above 5 percent in the fourth quarter."

Surveyed firms said strengthening market conditions supported higher demand and increased activity. Growth was recorded across most business segments - including manufacturing, construction and services - while wholesale and retail activity fell compared to October.

New business inflows also increased in November, ending an eight-month period of decline. Panelists attributed the rise to easing price pressures.

Despite the improvement, firms remained cautious about hiring, leaving staffing levels unchanged. This contributed to rising backlogs of work for the third consecutive month.

"The improved picture in the non-oil economy was linked to strengthening demand conditions and reduced pressure on business costs as stronger exchange rates helped importers," said Owen.

He added: "Not only did new orders rise at the quickest rate in five years, but the uplift was widespread, with manufacturers, construction firms and service providers all noting an expansion. This provides hope that the improvement will be sustained, which may encourage firms to raise their staffing numbers and procurement activity."

Expectations for future activity stayed positive in November, with firms citing strong demand as the main driver of optimism.

Qatar's non-oil business conditions improve
Qatar's non-energy sector recorded renewed gains in activity and new business, while hiring continued to rise sharply, marking one of the fastest increases since the survey began.

The November reading was only slightly below the long-run average of 52.2 since 2017.

Trevor Balchin, economics director at S&P Global Market Intelligence, said: "Qatar's non-energy private sector companies reported a stronger business climate in November, as the PMI rebounded from October's nine-month low of 50.6 to a three-month high of 51.8, almost returning to the long-run trend level of 52.2."

He added: "That said, overall growth in 2025 is looking to be the slowest for any calendar year since 2020."

Business activity in November was boosted by a renewed expansion in new orders, driven by increased demand, improved marketing, discounts, market expansion, new contracts, company reputation and population growth.

Job creation at Qatari non-energy firms remained elevated and was the fifth-highest in the survey's history.

Companies taking part in the survey said this robust hiring was intended to meet demand across sales, marketing, operations and new projects.

Looking ahead, Qatari non-energy firms expressed optimism about the next 12 months, citing improving market conditions, population growth, government initiatives, industrial development and increased investment as key drivers.

Arab News