Activity at Lebanese Private Sector businesses remained subdued in May. Surveyed companies identified security issues, cash-flow problems and the political environment as negatively impacting demand. Commenting on the May 2018 PMI results, Riwa Daou, Economist at BLOMINVEST Bank, said: “In spite of the minor rebound registered by the BLOM Lebanon PMI in May, the overall picture of the private sector economy remains grim on account of subdued domestic demand. Although the first Parliamentary elections in 9 years, held on May 6th, marked a positive step towards the implementation of a long-overdue reform agenda, the country remains in a wait-and-see mode ahead of the government’s formation.”
The BLOM Lebanon Purchasing Managers’ Index (PMI) registered 46.4 in May 2018 compared to 46.2 in April 2018. The activity at Lebanese Private Sector businesses remained subdued in May with surveyed companies identifying security issues, cash-flow problems and the political environment as negatively impacting demand.
In fact, the downtick in lending activity signals a lower level of overall demand.
According to the Central Bank of Lebanon, the banks’ claims on resident customers declined in each of the first two months of 2018. In February, the banks’ claims on resident customers dropped by 1.99% to reach $52.38 billion.
The decline in the value of cleared checks continues to reflect slower business activity. According to the Association of Lebanese Banks (ABL), the value of cleared checks registered another decline in April, reaching $22.13B by April 2018, down by 1.39% compared to the same period last year. Likewise, the total number of cleared checks fell by 0.8% year-on-year to reach 3.93 million by April 2018.
The registration of new passenger and commercial cars also mirrors the subdued level of demand. According to the Association of Lebanese Car Importers (AIA), the number of newly registered “commercial” and “passenger” cars recorded a 5.65% annual downtick to settle at 10,909 cars by April 2018. The number of newly registered “passenger” cars dropped by 4.41% year-on-year (y-o-y) to settle at 10,184 cars while the number of newly registered “commercial” vehicles contracted by a yearly 20.15% to 725 cars.