Acute drop in production and employment of the private sector

The BLOM Bank indicator for economic activity of the Lebanese private sector companies (PMI) has posted 45.1 points last September with a slight rise against August figures (45 points) but has pointed to another serious decline in the overall economic conditions of the sector across the country. To note, PMI is a complex indicator calculated on the average of five basic components that determine the activities of companies as such: new orders at hand (30% of the indicator); level of production (25%); level of recruitment (20%), dates of delivery to suppliers (15%) and procurements (purchasing) stock (10%), (whereby 50.0 point is equivalent to the zero point). The BLOM Invest report maintained that the continual decline in the volume of new incoming businesses during September has been a key factor for the shrinking level of production in the private sector. This, besides the continuing negative levels of demand enthused by a precarious political conditions. The month of September has again witnessed a fall in the level of orders of new exports and a similar fall in the volume of purchases at private sector institutions, with an increase in the average prices of purchases for three months in a row. On the other hand, the report pointed to a slight and almost marginal increase in the rate of deflation as compared to August (50.4 points from 50.2 points in August). In terms of jobs, the rate of recruitment in the private sector has dropped for the 7th consecutive month, with companies reducing the number of their personnel due to a weak transaction activity. Subsequently, the indicator recorded 49.7 points from 49.5 points in August. Meanwhile, data has indicated a minor increase in the average rates of salaries/wages during September, for the third time in the past four months. (Al Akhbar, Al Hayat, October 6, 2016(