BTA-BankMed index shows drop in turnover

Wholesalers still willing to invest

BTA-BankMed index shows drop in turnover
Wholesalers still willing to invest

The Beirut Traders Association (BTA) -BankMed Investment Index indicated that the turnover component of the index slipped during the fourth quarter of 2013.

The index, launched in October 2013, is a tool to evaluate the overall situation of the commercial sector, mainly assessing the reality of the wholesale sector. It is backed by the technical support of the Central Administration of Statistics (CAS).

The index consists of two components: The ‘Turnover Component’, which evaluates the amount of sales during the quarter under study in comparison with the same quarter of the previous year, as well as the preceding quarter of the same year. The Turnover Component evaluates the activity of wholesalers.

This component recorded an 9.78 percent drop in activity in comparison with the same quarter of 2012. This decline was attributed to the undermined purchasing power of consumers. It was also due to the absence of visitors, especially from the Gulf.

This has led to a contraction in retailers’ sales, causing an accumulation of their stock, and consequently resulting in a decrease in retailers’ orders from wholesalers.

This drop weighed on sectors such as perfume and cosmetics which fell 20 percent, as well as electrical generators, which recorded a decrease of 33 percent.

The second component examined by the index is the ‘Intention to Invest’. It assesses whosaler short-term investment appetite.

In spite of the decline in some sectors, there is still intention to increase investment in the near future, especially in household electrical equipment, computer parts, food products, consumer goods, and pharmaceuticals.

Only three sectors are considering reducing their investment: Perfumes and cosmetics, clothes and textile, and electrical and electronics sectors.