BEIRUT: Lebanon’s private sector performance improved slightly in April but remained below the average acceptable ceiling of 50, according to BLOMINVEST PMI Tuesday. “At 46.7 in April, the BLOM Lebanon PMI rose from 46.3 in March. The latest reading pointed to a further deterioration in Lebanese private sector operating conditions, although the rate of decline was slower than in March,” the report said.

It added that a driving factor behind the further reduction was a continued contraction in output during April.

“Panel members suggested that latest decline was due to a widespread economic slowdown. Although still sharp overall, the rate of deterioration eased from March,” the report said.

Commenting on the results, Fadi Osseiran, general manager at BLOMINVEST Bank, said: “The formation of a new government gave the economy breathing space with a PMI above 46.3 since February.

“However, it is only with a reforms-based government budget that the economy has a chance to pick up. The budget deficit will have to drastically decline in order to unblock donors’ soft loans pledged at the CEDRE conference to build the fading infrastructure and for investors’ confidence to be restored.”

The Purchasing Managers’ Index is a composite index, calculated as a weighted average of five individual subcomponents: new orders (30 percent), output (25 percent), employment (20 percent), suppliers’ delivery times (15 percent) and stocks of purchases (10 percent).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

BLOMINVEST noted that a slowdown in demand was also evident in April. Sales at Lebanese private sector firms have now fallen in each month since June 2013.

Although the rate of contraction eased slightly from that seen in March, it remained historically elevated and sharp overall.

“The reduction in new business was partially driven by a further decrease in international sales. Some firms attributed the decline to regional instability. That said, the latest contraction in exports was only marginal overall and the softest recorded for nearly a year,” the report added.

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