The Monthly PMA Business Cycle Index (PMABCI) – December 2017
Slight decline in the overall index
The PMA has released the results of its Business Cycle Index (PMABCI) for December 2017. The results revealed that the overall index remained close to the previous level, declining only by 0.1 point (to -5.7 points), owing to similar declines in the indices of both the WB and GS. As such, the PMABCI remained below the corresponding month in 2016, when it stood at 2.7 points.
In the WB, the overall index decreased from 6.6 points in November to 5.5 points in December, due to a notable drop in the furniture index from 3.4 to -0.9 points, followed by slight declines in food and paper indices. However, the remaining sub-sectors' indices improved, particularly for the construction industry (from -2.0 to -0.7 points), and the engineering industries (from -0.8 to 0.2 points), followed by slight increases in the sub-sectors' indices of: textile, leather, plastics, traditional industries, and chemical and pharmaceutical industries.
The fall in the WB's index mirrored lower production and sales levels during December, as indicated by industrial firms' owners. Nonetheless, future expectations of production and employment have picked up.
Likewise, the volatile index in GS fell marginally from -36.0 to -37.8 points in December owing to minor declines in some sub-sectors' indices (paper, furniture, plastics, construction industry, and pharmaceutical and chemical industries), accompanied with stability in the remaining sub-sectors’ indices (food, textile and engineering industries). Moreover, production and sales slipped compared to the previous month, as indicated by industrial firms' owners, resulting in accumulated inventory.
It is worth noting that the Gazan index remained stuck in the negative zone for more than four years now, which reflected the adverse political and economic conditions in the Strip, the continued Israeli siege, the near-complete closure of the Rafah border crossing, and the prolonged delays in reconstruction efforts. Moreover, future expectations remained lackluster this month.
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 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.
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