How non-oil private sectors in Lebanon + Qatar fared in February

Lebanon’s non-energy private sector growth slowed down ever-so slightly in February from the more than decade-long high recorded in January, as growth continued to be supported by greater levels of new business, especially coming from abroad, according to Blominvest Bank’s Lebanon PMI (pdf). The nation’s headline figure came in at 50.5, down from 50.6 in January, marking Lebanon’s second month in expansion territory since July 2023.

REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

Outstanding business levels were at their highest mark since the survey began in May 2013, with improving sales performances pushing companies’ operating capacities “as evidenced by an uptick in backlogged orders,” according to the report. The country also saw an upturn in sales that was also among the sharpest on record. This reflected in “greater new business volumes from overseas customers,” with private sector firms registering higher new export orders for the first time since November 2023.

Geopolitical factors may be behind the slowdown: “The PMI may have eased due to Israel's continued presence in five strategic locations, which threatens Lebanon's security,” Blominvest Bank’s Mira Said said.

New order growth was also sustained throughout the month, albeit at a lower pace than in January. Meanwhile, purchasing activity saw its fastest expansion since 2013, with stocks of inputs expanding at an accelerated pace.

Price pressures rose during the month, as a sharp rise in purchasing costs drove up businesses’ operating expenses. Meanwhile, “greater shipping fees were accompanied by vendor charge increases” — all of which collectively contributed to output price inflation accelerating towards a near two-year high.

Businesses remain confident: “The year-ahead outlook also remained buoyant, with survey respondents predicting further activity growth over the next 12 months.” The election of a new president and the formation of a new cabinet — one that is believed to be pro-reform — have boosted optimism among Lebanese businesses, Mira Said wrote.

Over in Qatar: Qatari non-oil private sector’s growth rose for the first time in three months in February, in a jump that indicates “a faster overall improvement in business conditions in the non-energy private sector economy,” according to Qatar Financial Center PMI (pdf). The nation’s headline figure rose to 51.0, up from 50.2 in January, sending Qatar more comfortably above the 50.0 threshold indicating growth.

New orders fell for the second month running, but overall business activity remained broadly stable. Meanwhile, purchasing activity slowed down once again, with firms optimizing inventories with a reduction in stock levels for the second month in a row.

Employment grew at a record high of 61.9 in February, extending the current sequence of job creation to seven consecutive months. The wholesale & retail sectors posted a fresh record increase in jobs during the month, while the construction sector saw the slowest level of recruitment this month. "The employment component was the dominant influence on the headline PMI in February. The four other sub-indices included in the calculation of the PMI all had negative impacts, albeit each to lesser degrees than in January,” S&P Global Market Intelligence’s Economics Director Tyler Balchin said.

Qatari businesses remain optimistic: “Outstanding business continued to increase and the 12-month outlook remained positive, with confidence holding above the post-pandemic average,” Bachlin said.