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Further contraction in private sector’s economy: PMI slows to 45.0

06 September 2016

The private sector companies witnessed faster contractions in output and new orders during the month of August. This was reflected by Lebanon’s monthly Purchasing Managers’ Index (PMI), released by BLOMINVEST Bank and compiled by Markit, which remained below the threshold separating economic growth from contraction. Commenting on August’s PMI results, Dr. Ali Bolbol, Economic Advisor at Blominvest Bank, noted that “There were no surprises in August’s 2016 PMI results for Lebanon. Headline PMI fell to 45 from 45.5 recorded in July 2016, signifying a slightly faster deterioration in business conditions. All sub-indices performed badly, with the sharpest declines registered for output and new orders. Particularly worrying was the decrease in the prices for final goods and services, the sharpest since March 2016. This is because it translates to further increases in real interest rates, making it harder for businesses to manage their cash flow and to service their debt. If only politicians can read intelligently these endless deteriorating business conditions, and provide the country with the needed political and economic respite.”

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