The PMA has released the results of its extended Business Cycle Index (extended PMABCI) for February 2019. The results revealed an improvement on the overall level due to the remarkable pickup in the West Bank’s index, despite the notable decline in Gaza Strip’s index. Accordingly, the overall index increased to around -1.1 points in this month compared to -7.3 points in the previous month, but close to its corresponding level of the last years (-1.8 points).
In the WB, all sectoral indices experienced improvements, except of relative stability in the renewable energy index (at around 0.1 point). These expansions headed by the remarkable jump of the trade index (from -1.7 to 2.5 points), followed by the agriculture index (from 1.4 to 4.5 points) and the industry index (from 2.1 to 4.0 points). Meanwhile, the rises of the remaining sectors’ indices were lesser. The construction index increased (from -0.1 to 0.5 points), the storage and transport index grew (from 0.0 to 0.5 points), while the least was in the information technology, whose index slightly picked up (from 0.3 to 0.5 points).
Consequently, the WB’s index managed to register 12.6 points this February compared to 2.0 points in last January. This pickup reflected higher existing and expected production levels in the coming three months, as indicated by the economic firms' owners.
Conversely, most of Gazan sectoral indices have declined, except of a modest increase in the agriculture (from -3.4 to -2.9 points) and the renewable energy (from -0.1 to 0.0 points). However, the trade index notably declined (from -19.1 to -21.1 points), followed by the drop in the industry index (from -4.5 to -5.6 points) and the transport and storage index (from -0.5 to -1.4 points). Meanwhile, the information technology index registered the smallest decline (from -0.1 to -0.3 points). As a result, Gazan index fell to its lowest within a year at -33.3 points, compared to -29.3 points in last January.
It is worth noting that the Gazan index has always registered negative values since the PMA started calculating the extended indices (since two years), which reflect the adverse long-lasting political and economic conditions in the Strip. According to Gazan firms’ owners, production and sales declined during this month, while they expect even worse production and employment levels during the coming three months.
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 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.