The Monthly PMA Business Cycle Index (PMABCI) – July 2017

An improvement in both the West Bank and Gaza Strip

The PMA has released the results of its Business Cycle Index (PMABCI) for July 2017. The results revealed subdued improvements in the indices of both the West bank (WB) and Gaza Strip (GS), which led Palestine's overall index to increase marginally, from 0.2 points last June to around 0.3 points this month. However, the index remained well below the corresponding month in 2016, when it scored 15.1 points.
The WB's index continued to improve slightly during July, increasing from 14.4 points in June to 14.5 points this month. This trivial improvement came as a result of slight movements in the industrial sub-sectors' indices. The furniture index increased most (from 4.3 points to 6.0 points), while other indices (paper, plastic, construction industries, traditional industries and engineering industries) rose much less. On the other side, the main decline (from 3.1 points to 0.0 points) occurred in the textile sub-sector, while the indices of food and leather fell only slightly. The pharmaceutical and chemical industries index maintained its previous level.
Anyway, the slight rise came against the backdrop of mild increases in production this month, as industrial firms' owners indicated. Moreover, owners expected a little better production and employment levels in the coming months.
Similarly, the highly volatile index in GS witnessed a small increase (from –37.2 points in June to -36.4 points this month) in light of an increase only in the engineering industries index (from -7.5 points to -6.7 points); the remaining sectors' indices maintained their previous level. 
It is worth noting that all indices of Gazan industrial activities (except for the food index) remained in the negative zone for the fifth consecutive month, while the overall index remained stuck there for more than 40 months. Those negative values reflected the adverse political and economic conditions in the Strip; the continued Israeli siege; near-complete closure of the Rafah border crossing; and prolonged delays in reconstruction efforts. 
It is noteworthy that the PMABCI is a monthly index, which aims to capture the state and evolution of economic activity in Palestine by tracking the performance of the industrial sector, especially fluctuations in production and employment levels and their implications for the economy at large. The maximum value of the PMABCI is positive 100 point, while the minimum is minus 100 point; a positive value indicates favorable economic performance, while a negative value indicates bad performance. On the other hand, a value close to zero indicates that economic performance did not change and is unlikely to do so in the near future.
 

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