Qatar's Purchasing Managers' Index fell sharply to 38.7 in March from 50.6 in February, signaling a severe contraction in the non-energy private sector as regional conflict disrupted demand. The reading marked one of the steepest deteriorations in business conditions in recent years, driven by a record decline in new business, delays, and suspended operations.

The downturn follows the outbreak of war involving the United States, Israel, and Iran in late February, which has disrupted flights and shipping routes and heightened economic uncertainty across the Gulf. Output in Qatar's non-energy sector declined for the fourth consecutive month, with companies cutting purchasing activity at the fastest pace since mid-2020.

Business sentiment has weakened significantly, with 70 percent of surveyed firms expecting output to fall over the next year. Many companies warned that a prolonged conflict could lead to recession, damage development projects, and slow activity in sectors such as real estate and tourism, further deepening the economic strain.