The PMI (Purchase Managers Index), published by BlomInvest, registered 47.9 points in May 2024, compared with 48.9 the previous month. This is the lowest figure in sixteen months.
Commenting on these figures, Helmi Mourad, analyst at BLOM Business Bank, stressed that the decline reflects the deterioration in business activity in the private sector. According to him, it is due to the significant fall in production indicators, new orders and export orders.
Mourad explains that the drop in new export orders is attributed to the escalation of geopolitical tensions due to the expansion of the war between Israel and the Gaza Strip. On the local market, however, the decline in new orders was due to military clashes between Hezbollah and Israel on Lebanon’s southern border, and to the political stalemate in the country, which has been without a president for over 19 months.
Mourad pointed out that, despite the decline in new orders, two positive factors stand out in the PMI report: the stability in the number of employees, as wage costs have remained constant, and the fall in the prices of goods and services for private sector companies.
“We hope that the summer season will help improve business activity for private sector companies,” he said.
The PMI is an indicator based on the monthly results of 400 companies.
It measures private commercial activity. It indicates a decline in activity if its value is below 50 points. If it is lower than that of the previous month, it means that the decline is continuing.
