Purchasing managers’ morale returns to positive territory in June

BEIRUT — The Purchasing Managers Index (PMI) developed by Blominvest, based on a monthly survey of 400 local companies, rose above the 50-point threshold again in June, reflecting cautious optimism within Lebanon’s private sector after the protocol agreement signed between Iran and the United States aimed at bringing a lasting end to the war, as well as the framework agreement concluded in Washington on June 26 between Israel and Lebanon. Saudi Arabia’s decision to once again authorize Lebanese exports, after a ban since 2021, also played a major role.

Having weathered the war relatively well, the PMI stood at 50.3 points, returning to positive territory after falling below the threshold in March, according to the latest update published in early July. A PMI above 50 indicates an expansion in activity, while a PMI below 50 signals a contraction. The further the index moves from the 50-point threshold, the stronger the pace of expansion or contraction.

"Lebanon's PMI rose to 50.3 points in June, compared to 49.7 in May, returning to expansion territory for the first time in four months. Growth was driven by new domestic orders, whose pace of increase reached its highest level in four months, while production also advanced at its fastest rate in four months to meet rising demand," commented Mira Said, economist and research officer at Blominvest.

Return of displaced people

The sub-index measuring new orders rose from 49.7 points to 50.2 points between May and June, following almost the same trajectory as production, which went from 49.5 to 50.2 points. "Both components probably benefited from the renewed cease-fire at the start of June and the establishment of 'pilot zones' (as part of the framework agreement between Israel and Lebanon), even if these remain imperfect," Said added.

New export orders remained in contraction, even though their underlying index reached its best level in four months (46.5 points versus 41.9 in May).

"Local orders also seem to have benefited from the partial return of internally displaced people, who resumed normal consumption and began repairs on their homes. They were also supported by increased interest in local products, as new taxes on certain imported goods —especially those generating waste after use — boosted their appeal among consumers," the economist further explained. The government suspended at the end of June the decree setting these environmental fees on 98 product categories.

However, morale remains far from high, as shown by the sub-index measuring purchasing managers’ expectations for the next 12 months. Though it jumped more than 12 points (from 24.3 in May to 36.7 in June), its level remains particularly low since the beginning of the war and well below the 50-point threshold.

According to one of the most recent estimates from the Institute of International Finance, Lebanon's GDP is expected to drop sharply in 2026, while the total cost of war-related damages has yet to be calculated.