The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for December 2018. The results revealed that the slow movements and the conflicting trends of the WB’s and GS’s indices have led to a relatively stabilized overall index at around -5.5 points. However, it remained slightly higher than the index of December 2017 (-10.0 points).
In the WB, the drop of the trade index (from -0.1 to -2.6 points), along with the falls in the agricultural index (from 3.1 to 2.2 points) and the construction index (from 0.2 to 0.1 points) have resulted in a declined index from 5.3 points in the previous month to around 4.5 points this December. However, the remaining sectors experienced rises, particularly the industrial index (from 1.4 to 4.0 points), while the indices of agriculture, and the IT and telecommunications have both grew (from 0.2 to 3.1 points) for each. At the same time, the renewable energy index managed to maintain its previous value of 0.1 points.
Overall, the fall in the West Bank's index reflected lower sales during December that resulted in higher inventory levels, as indicated by the economic firms' owners. However, owners expressed more optimistic expectations about production in the coming three months.
Conversely, GS index moderately picked up from -32.3 points in November to -28.9 points in this December thanks to the growth of the indices of the trade (from -19.7 to -17.7 points), the agriculture (from -4.4 to -3.4 points), the transport and storage (from -1.4 to -0.5 points), and the IT and telecommunications (from -0.2 to -0.1 points). However, the industrial index declined (from -4.9 to -5.3 points), and the construction index dropped (from -1.7 to -1.8 points). Meanwhile, the renewable energy index stabilized at the previous value of 0.0 points.
It is worth noting that the Gazan index has always registered negative values since the PMA started calculating the extended indices (two years ago), which reflect the adverse long-lasting political and economic conditions in the Strip. Nonetheless, production and sales during this month picked up as indicated by Gazan firms' owners, leading to a running out inventory. At the same time, future expectations about production and employment in the coming three months have notably improved.
It is noteworthy that the extended PMABCI is a monthly index, which aims at capturing the state and evolution of economic activity in Palestine by tracking sectoral performance (especially fluctuations in production, sales and employment levels). 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.