Conditions in Lebanon’s private sector economy have slumped to their lowest level in seven months, following declines in output and new orders.
The headline BLOM Lebanon Purchasing Managers’ Index (PMI) in August plunged to 48.7, below the critical 50.0 threshold, the latest business survey data showed.
The new data represented a loss of momentum when compared with the 10-year high growths in June and July.
“The contraction was precipitated by a simultaneous decrease in output and new orders, while employment stabilised,” said Stephanie Aoun, Research Analyst at BLOMINVEST Bank.
“The Lebanese economy heavily relied on tourism and expats activity and it seems that in August 2023, there was a drop in summer engagement activity.”
Aoun noted that the lack of economic reforms in Lebanon continues to “cast a shadow”, adding that without “meaningful changes”, the country will continue to face uncertainty.
Fastest decline in 6 months
The business survey found that activity in the country’s private sector fell in August for the first time since May. The decline was the fastest seen for six months, as challenging conditions in the country weighed on output volumes.
A slowdown in demand resulted in lower business activity during the month.
Survey respondents also reported challenges in attracting orders from international clients, while new export business subsequently declined for the first time since March.
(Writing by Cleofe Maceda; editing by Seban Scaria)