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How Lebanon’s private sector performed in November: Purchasing manager indices (PMI) tracking the non-energy private sector in Lebanon told a tale of ups and downs in November, according to Blominvest Bank’s Lebanon PMI (pdf). Lebanon’s headline figure rose significantly yet still settled below the 50.0 mark threshold, as new orders, output and purchasing was hampered by Israel’s attacks and domestic security concerns.
REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.
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Lebanon’s troubles ease: Lebanon’s non-oil private sector activity rose to a four month high, indicating the softest deterioration in market conditions since July, as rates of decline in new orders and output slowed. The country’s headline figure grew to 48.1 in November, up from 45.0 in October, when it fell to a 44-month low.
New orders and output rates contracted at a significantly slower place, signifying some “recovery in exports and in domestic demand,” BLOM Bank Chief Economist Al Bolbol said. The rate of decline in new export orders also eased considerably from last month, yet firms still cited that interest from international players was sparring, due to concerns regarding both domestic and regional conflict at large.
Hiring continues to fall and purchasing activity dipped for a fifth consecutive month, yet the decline in purchases slowed in comparison to the sharp drop recorded in October. This was buoyed by the Central Bank increase of USD liquidity in the country and a growing need for firms to “replenish inventories and to provide for the massive internal refugees”, Bolbol said.
Delivery times were extended, increasing at the fastest pace in 20 months due to poor road conditions and a lack of security. While work backlogs plummeted for the fourteenth month running.
Input costs were on the uptick, with high operational costs causing firms to increase output charges for a sixth consecutive month. Companies attributed the rising prices to Israel’s attacks on the country, which has restricted the nation’s capacity for new business orders and activity.
A bleak forecast for Lebanon: Lebanon’s economy managed to slightly stabilize itself in the aftermath of a steep slump in October, leaving some hopeful that “the good news is reinforced by a quick end to the war,” Bolbol stressed. Yet, survey respondents still remained pessimistic, as fears of an escalation in conflict between Israel and Hezbollah continued to pummel confidence.
