Qatar Business Optimism Index Q4 2009

1. Qatar Business Optimism Index Q4 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 businesses on sales, profit growth, investment etc • Provides analysis of major trends, outlook and issues concerning businesses

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 September 2009 for the 4th quarter of 2009 • Respondents were questioned about their expectations on relevant business parameters • Survey also captured respondent feedback on current business conditions

4. 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 • IMF revises world economic growth to -1.06% in 2009, recovery expected in 2010 with 3.1% growth • Advanced economies are expected to contract by 3.4% in year 2009, growth in 2010 projected at 1.3% • World trade volumes set to expand in 2010 by 2.5% • GCC growth to rebound to 5.2% in 2010

6. Economy of Qatar • At 11.5%, Qatar’s expected real GDP growth in 2009 is one of the highest in the world, and is forecast to surge to 18.5% in 2010 • Drop in hydrocarbon prices and production cuts will lead to contraction in exports by 16.5% in 2009, sharp recovery in 2010 Source: IMF

7. Business Optimism Indices • Expectations of a modest Improvement in sales and selling price leads to improved profitability outlook; employers looking at hiring again • BOI for all three parameters rises in Hydrocarbon sector

8. Business Optimism Indices Trend The Composite Business Optimism Index for the non- hydrocarbon sector stands at 82.13

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 53 in September • Deterioration in outlook for Q4 as compared to Q3 • 66% of companies expect no change in order book status • 31% expect to hire more employees; 50% expect higher profits

10. GDP 4.9% Construction Sector Construction Outlook 2008-13 Compound annual growth (%) BOI – Construction Sector • Construction sector worldwide is expected to be driven by policy measures, in the absence of private demand • Qatar’s construction sector has displayed a strong rebound in outlook for all parameters due to boost from government spending • 73% expect higher sales in Q4; 65% expect higher profits

11. GDP 3.6% Trade & Hospitality Sector BOI – Trade & Hospitality sector • Global trade & hospitality sector has been hit due to rising unemployment and falling disposable incomes • 53% of the respondents are optimistic on higher sales volume • Higher net profits are also expected by 45% of the companies in the fourth quarter

12. Logistics & Communication Sector Global transport sector has been hit by a sharp decline in global trade volumes; world trade volumes expected to be down 11.9% in 2009 68% of the respondents expect no change in receiving new orders New hiring is expected by 43% of the companies in Q4 GDP 3.3% BOI – Logistics & Comm. sector

13. Finance and Business Services Sector GDP BOI – Finance & Business Services sector 9.9% • The Global Services PMI for the month of September stands at 52.2 • Sector optimistic on volume of sales and new orders with 59% of the respondents respectively expecting higher numbers for both parameters

14. Oil & Gas sector GDP 61.7% • 50% of the firms expect selling prices to remain unchanged, 58% anticipate a rise in profits • The Composite Business Optimism Index stands at 80.77

15. Other Key Highlights • Logistics & communication sector remains most concerned about availability of finance; manufacturing sector’s most important concern is price of raw materials • 42% of companies in the non hydrocarbon sector to investment in business expansion; 31% have no investment plans • 57% of the respondents expect borrowing conditions to improve, only 2% expect a deterioration • 63% of companies in the hydrocarbon sector facing project delays • Availability of skilled labour is a growing concern for the business community in Qatar

16. Conclusion • With recent signs of global economic revival and government support through expansionary fiscal policy, optimism rises in Qatar; Construction sector most optimistic • Qatar’s manufacturing industry shows a drop in outlook levels with demand perceived to be uncertain • Activity in finance & business services sector is expected to improve with signs of increased liquidity in the international markets • Trade & hospitality sector is showing growing optimism as the global economy shows signs of recovery • Hydrocarbon sector expects higher profitability, but not optimistic about hiring plans

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