The PMA started publishing its indicator for the business cycle (PMABCI) on a monthly basis since November 2012. The indicator aims at monitoring fluctuations in economic activity, including production and employment, and their repercussions on the Palestinian economy. The importance of the PMABCI comes from providing real-time information about the economy, and thus, help the PMA in designing the appropriate monetary policy without having to wait for the release of macroeconomic indicators that need time for publication.
The indicator adopts the opinion polling methodology. A representative sample of industrial firms' mangers in GS and the WB are surveyed about their opinions of the level of employment, production and sales in the current time, and their expectations for the following months. After that, data is used to construct a business cycle indicator for a specific month. This indicator gives insights on the Palestinian general economic performance on that month, and the expectations for the few following months. Currently, a time series of the PMABCI is available for the period (Nov. 2012-May 2013).
The maximum value of this indicator is positive 100, while the minimum is minus 100; a positive value indicates favorable economic performance, and the bigger this value, the better the economy. But if the value is negative, then economic performance is worsening the closer it gets to minus 100. 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.
In general, The PMABCI indicates a positive trend for the WB business cycle during the previous months of 2013. On other hand, GS still suffers from fluctuations in its economic performance during the same period.