Beirut Traders Association and BankMed released the results of “Beirut Traders Association – BankMed Investment Index,” for the third quarter of 2014. The index, which is backed by the technical support of the Central Administration of Statistics in Lebanon, aims at assessing the reality of the wholesale sector in Lebanon.
The index reflects the investment climate in Lebanon, shedding light on the commercial activity and overall economic situation. The results for the third quarter of 2014 indicate that the “Turnover Component” of the index recorded a deterioration. However, the “Intention to Invest Component” of the index revealed a continued willingness to increase investment in the upcoming period.
The “Turnover Component,” which tackles the activity during the quarter under study, recorded a real deterioration amounting to 4.5 per cent in comparison with the second quarter of 2014. This decline is attributed to the security developments that occurred during the third quarter and which negatively impacted the wholesale activity. In addition, the difficulty of collecting dues from retailers further affected the wholesale sectors.
It is also worth noting that the continuous increase in the number of displaced Syrian nationals especially Syrian workers, who compete with the Lebanese workforce in the local labor market, resulted in the upsurge of local unemployment. This factor contributed to the further decline in the purchasing power of the Lebanese households, which in turn reflected negatively on the commercial activity.
According to the published results, most sectors witnessed significant real declines in several sectors, especially the Phone and Communication Equipment Sector and the Dairy Products, Eggs, Oils and Fats Sector. On the other hand, the Different Food Products & Consumer Goods Sector as well as the Books, Magazines, Newspapers and Stationery Sector maintained their previous results.
Despite the deterioration in commercial activity, the “Intention to Invest Component” revealed that there is no clear intention to disinvest in the wholesale trade sector in the near future. The observed results indicate that only one sector has shown willingness to disinvest which is the Electrical & Electronics Parts and Equipment Sector.
The “BTA-BankMed Investment Index” has become an important indicator of the activity in the commercial sector as it assists the caretakers in making educated decisions in their future investments.