The extended PMA Business Cycle Index (extended PMABCI) – February 2018

Improvement in the West Bank and drop in Gaza

The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for February 2018. This new index surveys, beside the industrial sector, six additional sectors, namely: agriculture, trade, construction, transport and storage, IT and renewable energy. The results of this index revealed an increase during February supported by the remarkable improvement in the West Bank's index and despite the deterioration of the index in Gaza. As such, the overall extended PMABCI picked up to -1.8 compared to -3.1 points in last January, and -1.6 points in February 2017.

In the WB, the index jumped from 6.8 points to 12.4 points this month, owing to rises in most economic sectors' indices. The growth of the industry and agriculture indices proved to be the engine of growth this month, as the former rose from 1.1 points to 4.3 points, and the latter shot from 4.5 points to 7.2 points. Moreover, the WB registered further increases in the construction sector's index (from -0.2 to 0.4 points) and the transport and storage sector's index (from -0.4 to 0.0 points). Meanwhile, the indices of the renewable energy and communications sectors relatively stabilized at 0.0 and 0.3 points, respectively. Conversely, the trade sector index fell from 1.0 points to -0.1 points during the comparison period.

Overall, the improvement in the West Bank's index mirrored higher production and sales during February and better future expectations about production, as indicated by economic firms' owners. 

Conversely, the volatile index in GS has deteriorated notably, declining from -26.6 points in January to -35.4 points in February due to drops in all sectors' indices, albeit at varying degrees. This decline was headed by the significant fall in the trade index (from -17.8 to -20.6 points), and the agriculture index (from -0.1 to -4.9 points). It also reflected lesser declines in the transport and storage index (from 0.2 to -1.2 points), the construction index (from -0.3 to -1.6 points) and IT index (from -0.1 to -0.3 points). Meanwhile, the industry and the renewable energy indices decreased marginally from -6.7 and 0.04 points, to -6.8 and -0.04 points, respectively. 

It is worth noting that the Gazan index register mostly negative values, which reflects the adverse long-lasting political and economic conditions in the Strip, the continued Israeli siege, and the prolonged delays in reconstruction efforts. As indicated by Gazan firms' owners, production and sales levels fell during this February, along with less optimistic future expectations about production and employment in the coming three months.

It is noteworthy that the PMA started publishing the extended PMABCI this month. The extended PMABCI is a monthly index which aims at capturing the state and evolution of the economic activity in Palestine by tracking the performance (especially fluctuations in production and employment levels) of the aforementioned seven economic sectors. The maximum value of the index is positive 100 points, while the minimum is minus 100 points; 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.


Categories: PMA, Statistics, Announcements