Lebanon’s Purchasing Managers’ Index (PMI), published by BlomInvest on Thursday, fell sharply in March 2025 to a five-month low, signaling deteriorating business conditions. The index registered 47.6 points, a significant drop from 55.5 in February, driven by declines in production and new orders.
Ali Belbol, a senior economist and the head of economic research at Blom Business Bank, described the decline as a “rapid shift toward economic instability.” He attributed the downturn to escalating regional tensions, including renewed clashes in Syria and heightened hostilities between Israel and Hezbollah, which have negatively impacted commercial activity in Lebanon’s private sector.
Belbol also criticized the government’s focus on political appointments over economic recovery, stating that officials seem more preoccupied with “dividing the economic cake rather than expanding it.”
Despite the bleak outlook, businesses surveyed in the PMI report expressed cautious optimism for the next 12 months, though confidence levels remain subdued. The report highlighted that companies attributed the drop in new orders to weakened consumer purchasing power and reluctance to spend on non-essential goods and services. Business activity saw its sharpest decline in five months, with a notable drop in demand from international customers due to rising export costs, logistical challenges and broader regional instability.
As incoming orders fell, companies reported a reduction in their backlog of work for the first time this year. However, the decline remains marginal, and firms have responded with only slight reductions in workforce numbers. According to the survey, just 1% of businesses reported job cuts, reflecting a modest adjustment to slowing demand.
The PMI, based on monthly data from 400 Lebanese companies, is a key indicator of private sector performance. A reading below 50 signals a contraction in business activity, with a decline from the previous month indicating a worsening economic trend. The latest figures reinforce concerns about Lebanon’s fragile economic landscape, as political uncertainty and regional conflicts continue to hinder recovery efforts.
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