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How Lebanon’s non-oil private sector performed in February: Lebanon’s Purchasing Managers’ Index (PMI) saw a dip in headline figures in February, as security concerns weighed down the economy according to Blominvest Bank’s Lebanon PMI (pdf). The reading saw a slight dip to 49.1, compared to 49.4 in January. Despite continuing to indicate contraction in the country’s economy, the measure remains close to the 50.0 no-change mark separating contraction from growth.
Security concerns were pivotal to the decline: New business and new orders fell, as the nearby war in Gaza dented company sales. Exports in particular were hard hit, as overseas clients were reluctant to place orders due to security concerns, the report said. Lower orders and declining sentiment saw a drop in employment, which fell at its quickest pace since May despite being limited. Despite lower staffing, backlogs continued to be reduced into this year’s first quarter, while pending orders fell at their slowest rate in three months.
On the upside: Purchasing activity in Lebanon held steady in February, ending a four-month fall. The improvement was driven by better supplier performance and shorter lead times, which fell for the first time since September. Faster deliveries allowed firms to accumulate stocks of inputs for the third straight month, the report said. Inflation also showed signs of easing, with the rate of inflation sticking close to the 28-months low seen in January. Operating expenses also increased at their second-lowest rate since mid-2023, the report also said.
Business sentiment however is at a seven-month low, as an extended war in Gaza, and domestic political and economic crises, continued to weigh down firms’ outlook.
ICYMI- The UAE and Saudi Arabia’s non-oil private sectors saw improvements due to new business activity in February, on the back of robust demand, with the UAE’s headline inching up to 57.1 from 56.6 in January, and KSA ramping up to 57.2 in February from 55.4 the previous month. Egypts PMI dropped to 47.1 in February, down from 48.1 seen the previous month.
