The Purchasing Managers Index (PMI), published by BlomInvest, recorded in April 2024 the lowest figure in four months, reaching 48.9 points compared to 49.4 the previous month.
Commenting on these figures, Fadi Osseiran, CEO of BLOM Bank, stated that this decline is due to difficult economic conditions in Lebanon. The reason behind the decline in the main index, according to him, is the fall in production indicators and new orders due to weak demand and a decline in business activity. This can be attributed to the explosive situation in south Lebanon and the war in Gaza, which affect economic forecasts in Lebanon.
He added that “despite these headwinds, there is a glimmer of hope in terms of flexibility, as the number of employees has largely stabilized in April 2024, indicating a certain degree of adaptation in the labor market.” However, the main concern is the latent geopolitical tensions in the region and their negative impact on prospects for stability and economic growth in Lebanon.
The results of the latest survey showed a decline in sales volumes for Lebanese private sector companies at the beginning of the second quarter of 2024. Escalation in south Lebanon and Gaza has increased security concerns at the local and regional levels, discouraging clients from placing new orders.
The total of new incoming business decreased at its fastest pace since the beginning of the year. The decline in new export orders was the fastest since December 2022, and the increase in transport costs to Europe, since the supply lines in the Red Sea were disrupted, led to a decrease in international sales.
The PMI is an indicator based on the monthly results of 400 companies. It measures private business activity. It indicates a decrease in activity if its value is below 50 points. If it is lower than that of the previous month, it means that the decline has continued.